Source: United States Department of Justice Criminal Division
Roberto Gustavo Cortes Ripalda (Cortes), 58, the co-founder, co-owner, and CEO of international advisory firm Biscayne Capital, was sentenced earlier today in Brooklyn, New York to 10 years in prison for conspiracy to commit wire fraud. Cortes pleaded guilty to the charge in September 2023. Cortes was also ordered to pay $3.4 million in forfeiture and $103million in restitution to over 110 victims.
“For more than five years, Roberto Cortes and his co-conspirators ran Biscayne Capital as a Ponzi scheme, lying to investors — including the defendant’s own friends and family members — and ultimately causing more than $155 million in investor losses,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “The sentence will hold Cortes accountable for his years of lies and deception. Thank you to our partners for their hard work and collaboration to achieve this result.”
“Today’s sentence reflects the seriousness of Roberto Cortes’s criminal conduct in orchestrating a years-long scheme with his co-conspirators to prop up a failing business while defrauding Biscayne Capital investors and clients around the globe,” said U.S. Attorney John J. Durham for the Eastern District of New York. “Using illegal Ponzi payments to their victims, Cortes and his co-conspirators were able to disguise and perpetuate this scheme for years until Biscayne Capital finally collapsed under the defendants’ lies. Today’s sentence demonstrates our Office’s commitment to holding accountable investment professionals who abuse the trust of their clients for personal profit.”
“Regardless of the complexity of the investigation, IRS Criminal Investigation Special Agents and our law enforcement partners will utilize their skills and unique authorities to hold bad actors like the defendant accountable,” stated IRS-CI Executive Special Agent in Charge Kareem A. Carter. “This was a brazen scheme of staggering proportions. Mr. Cortes and his co-conspirators prioritized their own greed, stealing $155 million from investors. Today’s sentencing sends a clear message that we remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”
According to court filings, Cortes and his co-defendant Ernesto Heraclito Weisson Pazmino (Weisson) founded Biscayne Capital in 2005 to support the financing of South Bay, their real estate development business focused on acquiring and demolishing properties to build luxury homes. After South Bay began experiencing financial trouble in 2007, Cortes and Weisson recruited investors to inject funds into South Bay’s operations. Rather than using those investor funds to fund South Bay’s real estate development projects, Cortes, Weisson, and their co-conspirators used the bulk of the funds to pay outstanding interest and principal debt obligations to other investors.
Cortes and his co-conspirators took numerous steps to perpetuate and conceal the scheme, including distributing investment documents with false and misleading information, deceiving investors about the purpose, risk, return, and security of their investments, and creating and sending fake account statements to unsuspecting clients to conceal the scheme. By the time the Biscayne Capital/South Bay Ponzi scheme collapsed and Biscayne Capital went into liquidation, Biscayne Capital clients had lost over $155 million.
IRS-CI investigated the case.
Bank Integrity Unit Deputy Chief Randall Warden and Trial Attorney Morgan Cohen of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorneys Drew Rolle and Benjamin Weintraub for the Eastern District of New York are prosecuting the case. Trial Attorney Brandon Burkart of the Criminal Division’s Fraud Section assisted with the investigation.
The Justice Department’s Office of International Affairs provided significant assistance in securing the arrest and extradition from Spain and obtaining evidence in this case. The Department of Justice also thanks the Governments of the Cayman Islands, Curaçao, Ecuador, Spain and Switzerland for their valuable support.