APOLOGISTS INTERRUPTED: Two Court Rulings Show That HYIP Operators, Players Setting Stage For Painful Downfalls, Foreclosures; Woman Loses Home While New Mom Loses Everything
Before long, Morgan left her husband for Rivas. The FBI, though, said Rivas had multiple “girlfriends” and that he purchased “luxury items” for them. When Rivas wasn’t busy dazzling his girlfriends, he was busy employing a chef to dazzle the taste buds of his workers in Tennessee, positioning himself as a boss who cared enough to give them the very best.
As do all Ponzi schemes, Rivas’ scheme collapsed. He tried to make it all go away by fleeing, but three of his investors sued him in bankruptcy court — and that action, in no small part, led to the discovery of the depths and breadth of the scheme.
Rivas got caught when he tried to outmaneuver his creditors by illegally shifting money from the estate, the FBI said.
In truth, though, the scheme was a fraud from the start and the last-minute maneuver by Rivas to outwit creditors was just a pathetic bid to line his pockets at the continued expense of his investors.
“Early investors received monthly payments made from the investments of newer investors, making this a classic ‘Ponzi scheme,'” the FBI said. The agency was assisted in the probe by the U.S. Secret Service, the IRS Criminal Investigations Unit and other agencies.
“Much of the investors’ money was never invested, but instead was used to purchase luxury items for Rivas, his girlfriends, and so-called equity traders,” the FBI said. “He misapplied invested funds with extravagant purchases of houses, cars, furs, jewelry, limousine service, clothing, home improvements and furnishings, hotel suites, and cash for ‘shopping sprees.’ These purchases were made both as lavish gifts and rewards to employees and others helping the defendant to further the scheme, as well as for personal gifts made from investor funds.”
In November 2007, with the Forex Project already impossibly upside down and just months away from collapse, “Rivas conducted a monetary transaction through a federally insured financial institution with the proceeds of the wire fraud scheme to purchase a Land Rover in Chattanooga for $163,000,” the FBI said.
Morgan was one of the recipients of Rivas’ lavish gifts. W. Grey Steed, the bankruptcy trustee and a former FBI agent, sued Morgan in a bankruptcy proceeding to force her to return her ill-gotten gains.
It became the duty of Cook, the bankruptcy judge, to sort through the entire sordid financial caper, which led to a full-scale public release of details about Morgan’s affair with Rivas.
