Investors were defrauded in a Ponzi scheme operated by Gaeton “Guy” Della Penna between 2008 and 2013, the Securities and Exchange Commission (SEC) has alleged.
Della Penna told investors their money would be used to trade securities or invest in small companies, but actually he “squandered their money on bad investments and personal expenses” between 2008 and 2013, according to the SEC.
To cover his trail, the SEC also alleges Della Penna provided some investors with false account statements to mislead them into believing they were profiting by investing their money with him.
“Della Penna lied to investors about his trading track record in order to gain their trust and pocket their investments,” said in a statement Eric Bustillo, director of the SEC’s Miami office. “He fostered a false sense of security by creating bogus account statements showing positive returns when, in reality, he was operating a Ponzi scheme and stealing investor money.”
According to the SEC’s complaint, many of the investors in Della Penna’s scheme were acquaintances who he met through his church. He solicited investors to purchase notes in his private investment funds, often promising 5 percent annual returns along with 80 percent of the trading profits generated with their investments. He later promised some investors 10 percent returns on their money to be used for investing in small companies.
All the while, Della Penna was siphoning away investor funds to the tune of about $1.1 million to make mortgage payments on his 10,000-square-foot home and provide support for his girlfriend, the compliant said. Della Penna also allegedly transferred some investor funds into accounts at Gaeton Capital Advisors which was also listed as a defendant in order for the SEC to return all investors their cash.
The SEC is seeking financial penalties, disgorgement of ill-gotten gains plus prejudgment interest, and a permanent injunction against Della Penna. In a parallel action, the US Attorney’s Office for the Middle District of Florida announced criminal charges against Della Penna.