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| Rivas Sentenced To 24 Years In Chattanooga-Based Swindle posted November 19, 2009
Luis Rivas, 56, appeared before Federal Judge Curtis Collier. He was also ordered to make over $18 million in restitution. Judge Collier said it was likely the largest fraud in the Eastern District of Tennessee and possibly in the entire state of Tennessee. Agents said there were as many as 479 investors, including a hundred or more whose finance were "decimated" by the fraud. Judge Collier said he received letters from those who still support Rivas and wanted him released so he could resume his foreign currency trader and possibly pay them back. But the judge called him "a con man" who would return to the same ways. He said Rivas had been given a 12 and a half year sentence in Arizona on a foreclosure fraud and three years in Florida for fraud. He said it was highly unusual that a con artist would be able to get away with such a large fraud without some of the investors checking into his background. The sentencing range was 235-293 months. Mary Ellen Coleman of the federal defender's office asked that Rivas be given a sentence of about 10 years so he would have time to try to work to repay his victims. She said that is his main aim "to see they are paid back every penny." She said Rivas has been meeting with agents from the IRS and the Bankruptcy Court who are still trying to sort out the tangle of the scam that took in investors from 23 states. Rivas, who once stayed in the finest hotels but who was now in handcuffs and leg irons, read a statement in which he, too, said he was seeking to make investors whole. He issued a plea to those who still have fancy cars and fine homes that he gave them with investors' money to give them up so the money can go to creditors. But prosecutor Gary Humble asked for the maximum saying Rivas is an incurable con man who "sat across the table from people and lied to them though he knew he was taking their life savings." IRS criminal investigator Scott Kennedy said it is the biggest and most complex fraud he has seen in his 23 years as an agent, said Rivas maintained at least seven bank accounts as well as a central account for the Forex (foreign currency) trading in Salt Lake City. He said Rivas actually traded only about 20 percent of the largesse he took in. He said he had gains in a couple of the foreign currency accounts, but losses in about 15 others. The agent said foreign currency trading is extremely complex and difficult to master. He said Rivas promised many investors 60 percent returns per year over three years and some as much as 120 percent returns. Agent Kennedy said Rivas lavished gifts on his multiple girlfriends and employees, including fur coats, trips, expensive cars, jewelry and homes. He bought a $163,000 Landrover for one employee in Chattanooga. He set up offices in five other states, while operating from a base at a leased office at Bonny Oaks. He said the payroll at the Spartanburg, S.C., office alone was running $1 million a month, and a chef was brought in to cook for the Chattanooga workers. Agent Kennedy said after some creditors forced him into bankruptcy, Rivas had cash wired to a bank in Dalton, Ga., and dispatched a girlfriend to pick it up and then pay cash for a van with the money. He said he then left the area in the van with another girlfriend. They went to Arizona and were eventually caught in Kansas. Gray Steed, a retired FBI agent who is the bankruptcy trustee, said he is still trying to track down all the money and sort out the legitimate claimants. He said he has heard a number of "sob stories" including one investor in North Georgia whose father needs an operation that the family is no longer able to afford. He said some investors, such as some doctors and lawyers, have not come forward because they are too embarrassed to admit they were taken. Judge Collier noted he had been taught, "If something is too good to be true, it is too good to be true." He said one letter writer said he has read the book that Rivas wrote recently while behind bars. Witnesses said they know of no money Rivas hid in any offshore accounts. Rivas, who has already been in jail over a year, earlier pleaded guilty to charges from Tennessee and South Carolina. He pleaded guilty to wire fraud, money laundering and bankruptcy fraud from Chattanooga and two counts of wire fraud from Spartanburg, S.C., where Rivas set up one of his offices. He had faced up to 20 years in prison on the wire fraud, 10 years on money laundering and five years on bankruptcy fraud. The case was investigated by the criminal investigation unit of the IRS, the Secret Service and the FBI. |  |                | |||
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