Former Miami Securities Professional Pleads Guilty to Securities Fraud in Connection with Multi-State Investment Scheme
|U.S. Attorney’s Office November 26, 2013|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; Michael B. Steinbach, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and Drew J. Breakspear, Commissioner, State of Florida’s Office of Financial Regulation, Bureau of Financial Investigations, announce that Daniel Paez, 27, of Miami, Florida, pled guilty today to one count of securities fraud before U.S. District Judge William P. Dimitrouleas, in connection with a scheme to defraud investors in Florida and several states. Paez faces a maximum of 20 years in prison and maximum $250,000 fine. Sentencing has been set for February 4, 2014 before Judge Dimitrouleas in Ft. Lauderdale.
According to court documents, Paez was the president of Fly High Investments, Inc., a Miami-Dade investment fund. From in or around September 2010 through in or around April 2012, Paez obtained more than $500,000 in funds from investors via telephone solicitations and through the Internet. Paez told investors that Fly High Investments was a hedge fund that managed more than $50 million, and he promised investors that their money would be invested in safe and secure investments. Paez also promised a fixed rate of return and that investors could withdraw their money whenever they wished. Instead, according to the information, Paez spent the bulk of the money raised from investors at casinos and also withdrew large amounts of cash for his personal benefit. Paez did invest certain investor monies in stocks and other securities, but often in high-risk investments or penny stocks that were materially different than the specific investments promised to investors during their sales pitch.
When investors contacted Fly High Investments and Paez to inquire about the status of their funds, Paez misled investors into believing their money was safe and had been invested profitably. Paez ultimately stopped returning calls and ignored requests for the return of investor funds. According to the Information, there were approximately 17 victim investors who were located in Florida and other states, including California, South Dakota, New Jersey, and Minnesota. None of these investors received any return on their investment and they lost all of the money they invested with Fly High Investments and Paez.
Mr. Ferrer commended the investigative efforts of the FBI and the State of Florida’s Office of Financial Regulation, Bureau of Financial Investigations. This case is being prosecuted by Assistant U.S. Attorney Jerrob Duffy.