Jeweler Luis Felipe Perez Charged With Running $40 Million Ponzi Scheme by SEC

Luis Felipe Perez is just the latest South Florida man to see his Ponzi Scheme toppled. The SEC has charged Perez with running a $40 million Ponzi scheme that targeted the local Hispanic community since 2006. Havana-born Perez ran a jewelery and pawn shop business, and promised investors returns of anywhere...

By Kyle Munzenrieder

June 2, 2010

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Luis Felipe Perez is just the latest South Florida man to see his Ponzi Scheme toppled. The SEC has charged Perez with running a $40 million Ponzi scheme that targeted the local Hispanic community since 2006.

Havana-born Perez ran a jewelery and pawn shop business, and promised investors returns of anywhere from 18 to 120 percent a year through monthly payment.

Social Affairs magazine called Perez, probably in an overstated sense common in glad handing manner of empty luxury magazines, "one of the most successful independent private jewelers in the country."

Investors thought they were investing in two of Perez's companies, Lucky Star Diamonds Inc. and Luis Felipe Jewelry Design Corp. (neither had employees other than Perez), and that their money was collateralized by diamonds. In fact, Perez said he kept diamonds in deposit safes, however they turned out to be fake.

Instead much of the money went to Perez's own lavish lifestye.

"He stole at least $6 million for lavish personal spending on limousines, extravagant dinners, bodyguards, and political contributions that helped bolster his image in the local community," says an SEC release.

Perez's political contributions went to Republicans, including Rep. Lincoln Diaz-Balart, John McCain's presidential campaign, and Norm Coleman's ill fated Minnesota senate campaign.

With stolen money he also bought a $3.2 million home, artwork, spent about $100,000 a year on travel, and about $1 million on jewelery.

"Perez created an aura of success around him to lure old and new acquaintances into investing substantial sums of money," said John C. Mattimore, Associate Regional Director of the SEC's Miami Regional Office in a statement. "Behind the luster of diamonds and jewelry, Perez told outright lies and made promises he couldn't possibly keep."

The scheme collapsed in June of 2009 when Perez was unable to recruit new investors.

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