25353: Hermantin(news)SEC targets alleged affinity schemers (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: leonie hermantin <lhermantin@hotmail.com>


Posted on Fri, Jun. 10, 2005


INVESTIGATIONS
SEC targets alleged affinity schemers
Three men were accused by the Securities and Exchange Commission for organizing 
an affinity scheme targeting South Florida's Haitian community.

Dow Jones News Service

WASHINGTON - Federal regulators on Thursday accused three men of selling $6 
million in worthless notes to more than 600 inexperienced Haitian-American 
investors in South Florida who were told they could make returns of 15 percent 
a year.

The Securities and Exchange Commission said Max Francois, Aiby Pierre-Louis and 
Jean Fritz Montinard reached investors by making presentations at churches in 
Miami and through a weekly talk-show on a Haitian radio station, WIQY-1320 AM.

The three told investors that their companies, Focus Financial Associates and 
Focus Development Center, operated many successful Haitian-American businesses 
that sought to create jobs for Florida Haitians, the SEC said. However, most of 
the companies were either failing or had collapsed and couldn't generate 
income, the SEC said.

ABUSE OF TRUST

''This case illustrates why affinity frauds are so egregious,'' said David 
Nelson, director of the SEC's regional office in Miami. 'The defendants here 
used their shared race and nationality to gain investors' trust. They also 
enticed investors with the assurance that their money would be used to develop 
and strengthen their own community.''

State Rep. Phillip Brutus, D-North Miami, an attorney, is suing the group.

''They played on these people's emotions and hard luck,'' said the 
Haitian-American legislator, who has been on the radio to warn the Haitian 
community about the group.

EXTENT OF DAMAGES

At one meeting on the matter, Brutus said there were more than 20 people who 
reported being duped. He believes the numbers could be as high as 1,000 in the 
Haitian community, with entire families involved.

One victim, he said, mentioned that he had invested as much as $50,000.

The interest and principal payments made to existing investors came from funds 
provided by new investors, the SEC said. The SEC is seeking to recover money 
for the investors and to impose civil penalties.

An attorney for the defendants did not return a phone call.

Herald staff writer Jacqueline Charles contributed to this report.