Fraudulent Case: Alleged $500,000 Scam of a Family
Written by: Patrick Findaro
Last Updated: June 1, 2023Free Download Our Exclusive E2 Visa Business Guide
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Every month, Visa Franchise speaks with hundreds of foreign nationals. People interested in investing in a business that would qualify for an E-2, L-1, or EB-5 investor visa. Unfortunately, we hear of many cases of immigrants falling prey to fraudulent business investments. We wanted to take a look at a particular fraud case. Argentinian and Brazilian nationals colluded together to defraud. Nearly $500,000 from a Brazilian family applying for the E-2 visa, according to the complaint.
According to the Complaint, trucking and logistics companies JAG Express Corporation (“JAG”) and American Growing Business Corporation (“AGB”) intentionally defrauded the Rabelos, a Brazilian family that owned R4 Transportation and Logistics, LLC in a $500,000 trucking scheme.
Contents
Rubens and Hortencia Rabelo, ran R4 Transportation and Logistics, LLC, with their two daughters, Luana and Lorena. Luana was a childhood friend of Thalles Gomes, the main solicitor for JAG and AGB in Brazil.
Based on the complaint, Thalles Gomes initially pitched the idea to Luana and the Rabelos family in São Paulo in March 2016. The Rabelos alleged Thalles Gomes falsely claimed that his father had purchased him a truck that was working and producing great returns on the purported principal invested.
False Claims
JAG and AGB have nearly identical websites. They target people from South America and Spain who are interested in moving to the U.S. According to the complaint, they claim they will use investors’ capital to buy used trucks. That they will manage to generate extraordinarily high annual returns, more than 35% of the capital invested. The Rabelos family claimed they invested nearly $500,000 and received nothing in return. They were victims of a fraud.
According to the complaint, the Rabelos alleged the defendants made other fraudulent claims, including but not limited to:
- Hiring truck drivers and using their infrastructure of in-house mechanics and large logistics contracts.
- Buying several $80,000-$90,000 trucks. The defendants only bought a few trucks that were roughly $20,000 and unsuitable to use for work.
- Having 40 trucks of their own and 280 trucks from third-party investors
- Running the business for over 10 years and having secure investments
- Promising immigrants’ investments will qualify them to apply for permanent residence under the EB-5 program or non-immigrant E-2 investors visas
It is alleged that the defendants used the investors’ money to further promote their scheme, along with their own personal use.
The complaint states when the defendants were caught in their fraud they threatened their victims with legal action to remove the inoperable trucks from their yard in Medley, Florida.
Putting Up the Front
The defendants recruited through various means, including direct solicitations, internet advertising, sales meetings, and allegedly through a pyramid marketing scheme enlisting the aid of promoters who were paid commissions of about 15% of the capital raised. Based on the complaint, they set up sham entities with offices in Buenos Aires, Argentina and Medley, Florida.
The Rabelos family had three meetings in Florida, Uruguay, and Brazil. According to the complaint, the defendants knowingly presented false claims, documents, and written materials to the family. The Rabelos claimed they invested in 4 trucks for $89,000 each and one truck for $90,000, with an alleged promise from the defendants they will get more in return.
Fraudulent Case: When It All Came Crashing Down
As stated by the complaint, the Rabelos never received a penny in return of their $446,000 investment. They followed up with the defendants to have a Skype teleconference. But actually met with the defendants in their office in Buenos Aires, Argentina for about 3 hours. The Rabelos alleged that during the meeting, the defendants made additional misrepresentations. Including purported returns on investments, purported operational costs of the trucks, the number of employees of the defendants’ entities, and operational costs of the defendants’ structure. Plaintiff representatives secretly recorded the three-hour conversation in compliance with Argentine law.
Conclusion
It is important for any individual considering a business investment to thoroughly research to avoid fraud. Like different business opportunities with an attorney and business consultant before committing a U.S. investment. Speaking on the phone and meeting face-to-face with multiple immigrant investors who have gone through the same process, can greatly limit the likelihood that the individual invests in a fraudulent scheme or with unethical business partners.