Farias is also accused of misappropriating $2.4 million for his own personal expenses.
According to the complaint, Farias continued to mislead investors after he learned of the SEC’s investigation. It is alleged that he used letterhead from the SEC’s investigative subpoena as “proof” for investors that he was working with the SEC to take the IAL public.
“As we allege, Farias encouraged his victims to invest their hard-earned retirement nest eggs into his fraudulent business,” said David Peavler “Investors should always proceed cautiously whenever someone suggests moving funds from traditional retirement accounts to self-directed IRAs in order to make an investment.”
The SEC’s Office of Investor Education and Advocacy issued an investor alert on the risks associated with the use of self-directed IRAs in August of 2018.
The SEC’s complaint charges Farias and IAL with violating antifraud and securities registration provisions of the federal securities laws. The complaint seeks an injunction, as well, disgorgement plus prejudgment interest, and civil penalties.
