Imperia Invest IBC – Affinity Fraud (Deaf Investors)

Securities and Exchange Commission v. Imperia Invest IBC, Civil Action No. 2:10-cv-00986-B (D. Utah)

On October 6, 2010, the Securities and Exchange Commission obtained a temporary restraining order and emergency asset freeze against Imperia Invest IBC (“Imperia”) for defrauding more than 14,000 investors worldwide. The Commission’s complaint alleges Imperia raised in excess of $7 million, $4 million of which was collected primarily from deaf investors in the United States. In addition to the asset freeze, the court has granted the Commission’s motion for expedited discovery and prohibiting the destruction of documents.

According to the Commission’s complaint filed in the U.S. District Court for Utah, Imperia defrauded investors by soliciting funds via the internet to purchase Traded Endowment Policies (“TEP”), the British term for viatical settlements, claiming to pay investors a guaranteed return of 1.2% per day. The Commission alleges that Imperia promised unrealistic returns to investors. The Imperia website allegedly stated that an initial $50 investment would allow the investor to obtain an $80,000 loan from an unnamed foreign bank which would be used by Imperia to purchase a TEP; Imperia would then trade the TEPs and pay the investor the guaranteed return. The Commission’s complaint alleges that Imperia claimed to be licensed and located in both the Bahamas and Vanuatu when, in fact, it is not licensed to do business or located in either of those countries. It is also alleged that Imperia’s website stated investors could only access their profits by purchasing a Visa debit card from Imperia, but that Imperia has no relationship with Visa and was using the Visa name without authorization. Additionally, the complaint contends that Imperia took proactive steps to conceal the identity of its control persons by using an anonymous browser to host its website, by communicating with all investors via email without disclosing the identity of any control persons and by establishing off-shore Paypal style bank accounts to conceal the recipient of the investment proceeds.

The Commission’s complaint charges Imperia Invest IBC with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.