The case focused on a former Raymond James registered rep accused of aiding in a Ponzi scheme relating to an alleged fraudulent EB-5 investment program created in 2007.
EB-5 is a U.S. government visa program through which foreign investors and their immediate families can obtain permanent residency green cards by making a capital investment in a U.S. business.
Raymond James notes that it did not act as placement agent or in any other capacity for the program and none of the investors in the program purchased their investments through Raymond James.
The Raymond James financial advisor is no longer employed by the firm.
According to the Burlington Free Press, investor Alexandre Daccache filed the lawsuit in an attempt to recover the money “misused, commingled, and stolen by [the mountain’s developer and CEO] with the assistance of Raymond James …” for all the investors, according to court documents. The lawsuit accused the defendants of violating federal racketeering law, or the RICO Act.
“The members of the RICO enterprise had a common purpose: to increase and maximize their profits by illegally diverting funds that they knew belonged to investors for improper and unauthorized purposes,” Daccache’s lawyer, Tucker Ronzetti, wrote in the original complaint. “Defendants shared the bounty of their enterprise by sharing the illegal profits generated by the joint scheme.”
The Securities and Exchange Commission, along with the state of Vermont, accused the Jay Peak developer and CEO of fraud related to the EB-5 program.
“Raymond James worked diligently with the SEC-appointed receiver to structure a settlement that would ensure investors in the program are fairly compensated—either by funding the costs to finish incomplete projects or by returning funds where the underlying construction project is no longer feasible,” the company said in a statement.