United States Attorney Erica H. MacDonald today announced
the sentencing of ANTONIO CARLOS DE GODOY BUZANELI, 57, to 240 months in prison
for his role in a $150 million investment fraud scheme involving Brazilian
factoring. BUZANELI, who entered his guilty plea on April 19, 2018, was
sentenced today before Senior Judge Michael J. Davis in U.S. District Court in
Minneapolis, Minnesota. BUZANELI’S co-conspirators, JOSE MANUEL ORDOÑEZ, JR.,
48, was sentenced on January 23, 2019, to 120 months in prison and JULIO
ENRIQUE RIVERA, 62, will be sentenced on April 16, 2019.
U.S. Attorney Erica MacDonald said, “Antonio Buzaneli was
the primary architect of a $150 million Ponzi scheme that targeted hundreds of
victims worldwide, many of whom were elderly and vulnerable. Some victims lost
their retirement savings, others lost the ability to provide a college education
to their children or grandchildren. For these egregious crimes, Mr. Buzaneli
will spend the next 20 years behind bars. I applaud our law enforcement
partners for their steadfast efforts in seeking justice for the victims.”
“No matter how complex the scheme, the FBI is committed to
stopping fraudsters like these from preying on people, especially elderly
investors who may have lost their life savings in this case,” said Jill
Sanborn, Special Agent in Charge of the FBI's Minneapolis Division. “We are grateful
for our partners at the U.S. Attorney’s Office, the United States Postal
Inspection Service and the Minnesota Commerce Fraud Bureau for thoroughly
investigating this global scheme and bringing these criminals to justice; and
we believe this matter further illuminates the need for citizens to be wary of
those peddling these kinds of fraudulent business investments.”
“Our securities enforcement unit and the Commerce Fraud
Bureau began investigating this scheme after receiving a tip about a suspicious
investment opportunity being offered in Minnesota,” said Steve Kelley,
Commissioner of the Minnesota Department of Commerce. “We are proud that the
Commerce Fraud Bureau collaborated successfully with federal authorities,
bringing to justice a far-reaching operation that deceived Minnesotans.”
According to his guilty plea, BUZANELI, along with his
co-conspirators, ORDOÑEZ and RIVERA, were the principals of Providence Holdings
International, Inc., a company based in Key Biscayne, Florida. BUZANELI and
ORDOÑEZ became principals of Providence Financial Investments, Inc. and
Providence Fixed Income Fund LLC (collectively, along with Providence Holdings
International, Inc., “Providence”) in order to raise money from investors.
According to BUZANELI’s guilty plea and documents filed in
court, from about 2010 until June 2016, Providence raised approximately $150
million from investors worldwide by representing that Providence would invest
the money in Brazilian factoring. “Factoring” is a financial transaction in which
accounts receivable are purchased at a discount. Providence’s marketing
materials explained that in Brazil consumers write ten separate post-dated
checks for $100 – one per month – to pay for $1,000 in retail items such as
consumer electronics or groceries. The retailer then sells the post-dated
checks to Providence for approximately $820, and Providence earns $180 over ten
months as the checks mature. As a result, Providence claimed to make a 48
percent annual return on money invested in Brazil.
According to BUZANELI’s guilty plea and documents filed in
court, Providence raised more than $64 million from U.S. investors by employing
a network of brokers who sold promissory notes bearing annual interest rates
between 12 percent and 24 percent. Investors were told their money would be
used to factor accounts receivable in Brazil. BUZANELI, ORDOÑEZ and RIVERA
provided the brokers with an Executive Memorandum to show investors that their
money would be used to factor accounts receivable in Brazil. The Executive
Memorandum falsely stated that funds would be used “for the sole purpose” of
making loans to a Brazilian subsidiary of Providence “which will use the
proceeds of the loan to acquire receivables or financial instruments such a
post-dated checks and/or Duplicatas in the Brazilian Factoring Market.”
According to the defendant’s guilty plea and documents filed
in court, BUZANELI and ORDOÑEZ instead used a significant amount of the
investors’ funds to make Ponzi-style payments to other investors and to make
commission payments to Providence’s nationwide network of brokers. BUZANELI and
ORDOÑEZ also diverted investor funds to other companies they controlled,
including an import/export company, a travel company, a realty company, a
credit rehabilitation company, and a catering company and food truck operated
by BUZANELI’S wife.
According to the defendant’s guilty plea and documents filed
in court, BUZANELI and ORDOÑEZ also opened Providence offices and affiliates in
locations around the world, including London, Taipei, Shanghai, Singapore,
Vancouver, and Panama. For example, in 2011 and 2012, BUZANELI and ORDOÑEZ
opened Providence affiliates in the Bailiwick of Guernsey and in Hong Kong,
through which they raised approximately $85 million from offshore investors
based on the same lies they told investors in the United States – that their
money would be used to invest in Brazilian factoring. Instead, much of the
investors’ money was transferred to other Providence-controlled entities around
the world as well as to bank accounts controlled by BUZANELI and ORDOÑEZ, where
the money was used for payments unrelated to Brazilian factoring, including to
pay commissions to U.S. brokers and to make interest payments to American
investors in Providence’s U.S.-based entities. As a result of the fraud scheme,
Providence investors worldwide – including more than 500 victims in the United
States alone – lost a total of more than $100 million.
This case was the result of an investigation conducted by
the FBI, United States Postal Inspection Service, and the Minnesota Commerce
Fraud Bureau. United States Attorney MacDonald would also like to thank the
Securities and Exchange Commission for their assistance on this case.
Assistant U.S. Attorneys Kimberly A. Svendsen and Joseph H.
Thompson prosecuted this case.
Defendant Information:
ANTONIO CARLOS DE GODOY BUZANELI, 57
Coral Gables, Fla.
Convicted:
Conspiracy to
commit mail fraud, 1 count
Sentenced:
240 months in
prison
$51,353,861.45 in
restitution
Three years of
supervised release
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