Former Chattanooga foreign currencies trader Luis Rivas was sentenced to 293 months — about 24 years — for bilking investors out of millions of dollars.
Assistant U.S. Attorney Gary Humble said Mr. Rivas’ fraud was the largest consumer fraud case ever committed in the Eastern federal district of Tennessee.
Though investigators believe Mr. Rivas bilked his clients out of about $33 million over a two-year-period, the final figure for purposes of sentencing came to about $18 million.
“It was a conservative estimate,” Mr. Humble said after the sentencing.
Mr. Rivas had billed himself as a trader in foreign currencies who could win enormous returns for his approximately 500 clients, many of whom hailed from Chattanooga and ended up losing their livelihoods.
An FBI investigation revealed that Mr. Rivas did not invest the majority of the money he took in from clients, but instead paid out false returns with money received from subsequent clients that he solicited.
Mr. Rivas operated the classic Ponzi scheme out of his offices in Chattanooga, Spartanburg, S.C., and other locations around the Southeast.
He was sentenced in federal court in Chattanooga today.
For complete details, see tomorrow’s Times Free Press.
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Staff Photo by Dan Henry
Luis Rivas, right, leaves a Silverdale Detention Center transport vehicle along with other prisoners and is escorted into the federal courthouse to be sentenced on this morning.
Grey Steed, the trustee for the Rivas bankruptcy has just come out with third billings.
Trustee has recovered $3,567,074.57
There is only $2,686,184.32 of that left.
$880,890.25 in expenses of which $801,859.63 has gone to the Trustee and the lawyers and investigators he’s hired. Not one case has even gone to trial yet, but when they do the lawyer fees will really go up. Then you're paying thousands per day per lawyer, expert witnesses, etc.
If all Steed did was clear out Rivas's accounts, sell Rivas's stuff, take in all the money and gifts that people, like me, just handed over in June and July 08 (totals from later date auctions were added because the items were ceded immediately and sold later) then sat back and collected interest he would have recovered $3,073,391.49!
1,879,455.01 In Rivas accounts and sale of his possessions + 1,185,274.58 Money and gifts voluntarily ceded + 8,661.90 Interest since 6/08 =$3,073,391.49 Total
They have charged $801,859.63 to recover only $493,683.08 more than what was there in July 2008!
This is all in court documents that you can look at and confirm yourselves.
Why should Steed care if two dollars are spent for every one dollar added to the total amount recovered? He gets paid his percentage off that big number, the total amount recovered, before any costs are deducted.
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