A Video Plus a Sinatra Song Attracted Investors for Fraudster
A Wall Street office; a youtube.com video; Frank Sinatra singing New York New York. These were the keys to building an apparently successful commodity trading business that attracted clients – at least for a while. It ended, however, with a prison term. U.S. v. Jaramillo, No. 1:17-cr-0004 (S.D.N.Y.).
Pedro Jaramillo is a Peruvian national residing in Manhattan. Over a two year period beginning in early 2014 he raised about $1.2 million from over two dozen investors for trading in commodities. To attract investors Mr. Jaramillo obtained an office on Wall Street; he created a youtube.com video on which he featured his sales pitch. The background music was Frank Sinatra singing New York New York. A prominent Global Investment bank was used as a reference.
In meetings with clients at the Wall Street office Mr. Jaramillo promised potential investors that he would be a “trusted partner” who would establish an individual account for each person. That account would be individually managed and was federally insured. His proven track record assured success. These safeguards also protected clients against fraud and failure, according to Mr. Jaramillo.
While the glitz and sales pitch attracted investors, it did not protect them. No individual accounts were established. Much of the investor money was diverted to the personal use of Mr. Jaramillo. Other portions were used to repay prior clients.
Mr. Jaramillo pleaded guilty to charges of commodity fraud and wire fraud. The court sentenced him to serve twelve years in prison followed by three years of supervised release. In addition, the court ordered him to forfeit the proceeds of the scheme and to pay restitution in an amount to be determined.