SEC Charges Minnie Madoff Moises Pacheco

June 30th, 2009
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The Securities and Exchange Commission has charged Moises Pacheco, owner of Advanced Money Management Inc. and Business Development & Consulting Co, with operating a “ponzi-like” scheme through five hedge funds, the AP Premium Value Funds I through IV and Capital Partnership Group through trading covered call options. Pacheco was alleged to have raised $14 million over the span of three years under the premise that his funds generated substantial trading returns in the arena of 30-45%. In dollar terms, Pacheco claimed $9.7 million in trading profits while only generating $367,000. The returns, claims the SEC, were fabricated.

Pacheco was purported to have used investor principal in order to pay the returns he claimed until the scheme collapsed, leading the SEC to provide a caveat to any potential investors in “opaque” investment vehicles. Reminiscent of the Bernard Madoff scandal, although on a much smaller scale, Rosalind Tyson of the SEC states “Pacheco disseminated monthly statements reflecting purported profits and trading activity, but providing little detail about how those returns were generated …These investors were principally solicited through word-of-mouth, which serves as a reminder to beware of opaque investment opportunities that promise unusually high payoffs even if it’s a referral coming from family or friends.” None of the hedge funds were registered with the SEC.

As the scheme began to unravel, Pacheco told investors the drop in returns was due to a “deteriorating economic environment.” The SEC is seeking “permanent injunctions and financial penalties” for the fund manager. Further questioning is ongoing amongst the SEC and Pacheco to determine whether the investors were either sophisticated or accredited enough to understand the inherent risks to investing in such vehicles.
See Press Release
For Detailed Investor Profiles on these Investors, click below:
Advanced Money Management, Business Dev. & Consult.
Related People: Moises Pacheco
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News


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