| A federal court in Boston recently entered final judgments against the company officers and promoters of a pyramid scheme that targeted Latino communities, the Securities and Exchange Commission (SEC) said this week.
In total, the SEC charged two Portuguese companies operating under the name Wings Network, along with three company officers and 12 promoters in the scheme. This most recent judgment concerned three company officers and two promoters.
The SEC said that two companies with the name Tropikgadget, operating under the name Wings Network, claimed to run a multilevel marketing company that offered digital and mobile solutions to customers, including apps and cloud storage. However, Tropikgadget’s revenues actually came solely from selling Wings Network memberships to investors, not from the sale of any products, the agency said.
The SEC charged that the company relied upon the recruitment of new members, and commissions were paid to earlier investors with money received from later investors. According to the SEC’s complaint, the scheme raised at least $23.5 million from thousands of investors, including many in Brazilian and Dominican immigrant communities in Massachusetts.
The agency obtained judgments on Aug. 31 against three company officers and two promoters: Sergio Henrique Tanaka, of São Paulo, Brazil and Davie, Florida; Carlos Luis da Silveira Barbosa, of Lisbon, Portugal; Claudio de Oliveira Pereira Campos, of Lisbon, Portugal; Viviane Amaral Rodrigues, of Clinton; and Wesley Brandao Rodrigues of Marlborough.
The three officers – Tanaka, Barbosa and Campos – are enjoined from future violations of Sections 5 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. The two promoters – Viviane and Wesley Rodrigues – are enjoined from future violations of Sections 5 of the Securities Act.
The judgments also order Tanaka to pay more than $1.9 million, Barbosa to pay $300,284, Campos to pay $150,000, Viviane Rodrigues to pay $462,732, and Wesley Rodrigues to pay $162,404 in disgorgement of ill-gotten gains, prejudgment interest and a civil penalty.
Finally, all five are permanently barred from offering, operating, or participating in any marketing or sales program in which a participant is compensated or promised compensation solely or primarily for recruiting others into the program.
