JANUARY 2020 FRAUD OF THE MONTH

On January 30, 2020, the U.S. District Court entered a final judgment against Jeffrey A. Feldman, a Florida-based promoter of a pyramid and Ponzi scheme involving two purported gold mining companies. The SEC obtained final judgments against all 6 defendants, and 2 purported gold mining companies companies that were hyped Massachusetts-based DFRF Enterprises LLC, and Florida-based DFRF Enterprises, LLC. The cast of characters targeted investors in Spanish and Portuguese-speaking communities falsely telling them that the DFRF companies owned more than 50 gold mines in Africa and Brazil, and that an investment in these companies would be fully insured and guaranteed. Feldman appeared in promotional videos for the DFRF companies as part of a sales pitch to investors.

Feldman was enjoined from violating the registration provisions of Section 5 of the Securities Act of 1933 and also from offering, operating, or participating in any marketing or sales program “in which a participant is compensated or promised compensation solely or primarily (1) for inducing another person to become a participant in the program, or (2) if such induced person induces another to become a participant in the program.” The final judgments against Feldman, the DFRF companies and all of the other individual defendants, requiring them to pay more than $29 million in disgorgement and prejudgment interest, and more than $2.9 million in penalties.