March 30, 2010 – Enrique Villalba allegedly used his various business entities Money Market Alternative, L.P., Money Market Alternative Ltd., Money Market Plus, and Hybrid Money Market Management LLC to perpetrate a $39 million Ponzi scheme. In an Ohio federal court on Monday, the Securities and Exchange Commission (“SEC”) filed a complaint against Villalba alleging that he ran an investment scam from 1996 to 2009 that defrauded at least 26 investors.
According to the complaint, Villalba, 47, from Cuyahoa Falls, Ohio and a graduate of West Point, solicited investors by offering annual returns of 8% to 12% on their money. Apparently, Villalba claimed his “Money Market Plus Method” and “momentum filter” could predict changes in the market. Villalba also allegedly claimed that client funds would be secured by stop orders that would not allow the investments to lose more than 2% of the initial amounts. The SEC claims that Villalba promised clients that their money would only be invested in securities, including S&P 500 Index contracts, treasury bills or interest earning money market accounts.
Apparently, Villalba’s investments lost over $17 million from 1998 to 2009 even though he provided clients with quarterly statements showing their portfolios increasing in value. The SEC claims that Villalba misappropriated at least $6 million of client funds by using over $4.1 million to pay his salary and his companies’ overhead, purchasing $700,000 of real property, and using over $1.2 million to fund two of his Rico Latte coffee companies. Villalba also allegedly made Ponzi payments to clients with other investors’ money.
The SEC is seeking a permanent injunction against Villalba as well as disgorgement of ill gotten gains and civil penalties. In addition to the SEC’s complaint filed in the U.S. District Court in Cleveland, The U.S. Attorney’s Office for the Northern District of Ohio has filed a criminal complaint against Villalba. The U.S. Commodity Futures Trading Commission has also filed a complaint against Villalba.
Sources: SEC, New York Daily News
If you invested with Money Market Alternative, L.P., Money Market Alternative Ltd., Money Market Plus, Hybrid Money Market Management LLC, and/or Enrique Villalba, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.
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