Business | Six South Florida companies accused of wrongdoing by SEC

Six unrelated South Florida companies are facing various accusations of investment-related wrongdoing in a rapid-fire series of lawsuits by the U.S. Securities and Exchange Commission.

The suits, filed over an nine-day period from Sept. 18 to Sept. 26, allege a range of misdeeds including improper use of investment funds to buy jewelry, housing and luxury automobiles, failure to disclose investments in a company that employed an adviser’s spouse, failure to register as a broker or dealer while raising millions from investors, and diverting for personal use funds investors were told would be used to purchase diamonds.

Here are the defendants and the accusations they face, beginning with the most recent case:

Diamond Desk Corporation and its founder and president Adam J. Lowe

The Coral Springs company, formed in 2011, is accused of raising at least $2.2 million from investors in five states and misappropriating at least $935,000 for Lowe’s benefit, including to pay personal expenses and fund his gambling at various casinos across the U.S. From at least February 2018 through February 2019, investors were told their funds would be used to acquire parcels of raw color diamonds, known as “natural fancy color diamonds” that would be resold for profits that would generate investor returns, according to the lawsuit filed on Sept. 26.

Efforts to reach Lowe by phone and email were unsuccessful on Tuesday.

Nathalia I. Burgos, Christian A. Cuesta, Steven A. Fernandez, and Monica M. O’Mealia

The four are accused in a lawsuit filed on Sept. 22 of raising money from investors in an alleged $196 million securities fraud scheme by Pompano Beach-based MJ Capital Funding LLC in 2020 and 2021. The SEC previously charged MJ Capital and affiliate MJ Taxes and More, Inc, and their principal officer Johanna M. Garcia with perpetuating a fraudulent securities offering and Ponzi scheme. Investors were told the operation made “merchant cash advance” loans to small businesses and were promised monthly returns of 10% or more, the SEC said. In reality, money from new investors was being used to pay old investors in what the SEC called a “classic Ponzi scheme,” a news release states. The newly charged four are all accused of violating securities registration provisions of federal securities laws. Fernandez and O’Mealia consented to a settlement, subject to court approval, in which they will repay $755,017 and civil penalties of $75,000 each, without admitting or denying the allegations, the release says.

Burgos and Cuesta could not be reached for comment on Tuesday. Joel Hirschhorn, attorney for Fernandez and O’Mealia, said in an interview on Tuesday that the couple was drawn into the organization believing it to be legitimate. They have since disgorged money they amassed and luxury items they bought, and have “returned to a very modest lifestyle,” Hirschhorn said.

Empirex Capital LLC and founder Rafael Vargas

Vargas and his company are accused of raising at least $6.6 million from at least 162 investors in the U.S. and abroad between July 2018 and March 2023 by making “repeated material misrepresentations” about the profitability of Empirex and its use of investment proceeds. Vargas, according to the lawsuit filed on Sept. 21, misappropriated about $1.8 million, using investors’ funds to pay for jewelry purchases, housing, luxury car payments and for cash. The company made Ponzi-like payments to investors to mask Empirex’s failure to generate profits in “traditional” investments, investments in crypto assets, or a combination of both, the suit states.

A call to Empirex’s phone number was greeted by a recorded message stating the number was not set up to receive calls.

Lufkin Advisors LLC and Chauncey F. Lufkin III

The Riviera Beach-based company and its president were charged on Sept. 20 with “engaging in a fraudulent course of conduct,” including failing to properly account for withdrawals made from private funds they manage, losing control of crypto assets for at least a year without telling investors, and making multiple investments in a company that employed Lufkin’s spouse without notifying investors. The lawsuit states that Lufkin Advisors has failed to produce books and records requested by the SEC’s examination staff since March 2023.

The company did not immediately respond to a voice message and email seeking comment.

MFB 111 Investment LLC and Monise François Bien Aimé

The investment firm and its president were accused on Sept. 19 of fraudulently raising about $1.9 million from at least 170 investors between March 2021 and December 2022 through an unregistered securities offering. François and her company targeted South Florida Haitian Americans through Facebook videos and word of mouth, promising their funds would be used to purchase real estate for short-term Airbnb rentals, invest in mutual funds, and purchase a restaurant, gas station, and clothing to sell at François’ North Miami clothing store, the lawsuit states. The defendants, it says, falsely promised investors returns of 10% per week or month and return of their full principal within 90 days. Instead, $286,016 was misappropriated for François’ benefit, and investors have been unable to contact François since September 2022, according to the suit.

An effort to reach François via email on Tuesday was unsuccessful.

Wilson J. Rondini III, Falcon Capital, and Falcon Capital Partners Limited

From at least 2018 through the end of 2022, the defendants raised “tens of millions of dollars” on behalf of more than a dozen companies and bought and sold millions of dollars’ worth of securities for their own accounts without registering as required with the SEC as a broker-dealer or associate of a registered broker-dealer, according to a lawsuit filed on Sept. 18. Rondini, 60, lives in Palm Beach, the suit states. The companies retained a network of about 60 subcontracted salespeople to solicit investors in exchange for commissions on the sales, the lawsuit states.

His attorney, Fort Lauderdale-based David R. Chase, provided this statement in response to the allegations:

“The SEC did not charge Mr. Rondini III or the Falcon Entities with fraud, and its complaint does not allege any misuse of investor funds or misrepresentations regarding the nature of the investments sold. Rather, the SEC charged the defendants only with certain registration violations. Mr. Rondini III and the Falcon Entities will continue their efforts to reach a fair and amicable resolution of this case with the SEC.”

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at .