Roberto Gustavo Cortes Ripalda, the co-founder and former CEO of Biscayne Capital, has been sentenced to a 10-year prison term for his part in a fraud scheme that cost investors over $130 million, according to the U.S. Attorney's Office for the Eastern District of New York. Cortes pleaded guilty to conspiracy to commit wire fraud and, besides his prison sentence, has been ordered to pay $3.4 million in forfeiture and $103 million in restitution to the more than 110 victims of the scheme.
The sentence was handed down by United States District Judge Carol Bagley Amon, "reflects the seriousness of Roberto Cortes’s criminal conduct in orchestrating a years-long scheme with his co-conspirators to prop up a failing business while defrauding Biscayne Capital investors and clients around the globe," according to U.S. Attorney John J. Durham. Cortes and his co-conspirators had utilized Ponzi-style payments to mask their operation's insolvency from investors worldwide. The court filings revealed that their company, originally a real estate development business founded in 2001, had financial difficulties starting in 2007, which, led to the creation of fraudulent investment opportunities to draw in funds from new and existing investors.
In a statement from Matthew R. Galeotti, head of the Justice Department's Criminal Division, he highlighted the calculated deceit involved, saying "For more than five years, Roberto Cortes and his co-conspirators lied to Biscayne Capital investors — including their friends and family members — about how they were using millions of dollars of their investments." Galeotti pointed out that when Biscayne Capital's debt became overwhelming and incapable of repaying its early investors, the co-conspirators concealed their financial woes by misdirecting funds from new investments to old obligations, resulting in massive losses.
Kareem A. Carter, Executive Special Agent in Charge at the IRS-Criminal Investigation, Washington Field Office, emphasized the determination of the law enforcement agencies in unwinding the complex fraud, "This was a brazen scheme of staggering proportions. Mr. Cortes and his co-conspirators prioritized their own greed, stealing $155 million from investors." He assured the public that the IRS-CI and their partners will continue to pursue those engaged in fraudulent activities, signaling that financial crimes of this nature will meet with vigorous prosecution and serious consequences.
The prosecution of the case was managed by the Office’s Business and Securities Fraud Section and the Department of Justice’s Fraud and Money Laundering and Asset Recovery Sections, with Assistant United States Attorneys Benjamin Weintraub and Drew Rolle, and Trial Attorneys Randall Warden and Morgan Cohen leading the charge. International cooperation played a critical role in Cortes' arrest and the collection of evidence, with the Department of Justice thanking the governments of multiple countries, including Spain and Switzerland, for their assistance. Ernesto Heraclito Weisson Pazmino, Cortes' co-defendant, pleaded guilty in April 2022 to conspiracy to commit wire fraud and is currently awaiting sentencing, while another co-defendant, Fernando Haberer, remains at large.
