MIAMI, June 3 (UPI) -- A South Florida man accused of fraud, Louis Felipe Perez, used a flashy lifestyle to convince investors their money was safe with him, court papers say.
Court papers allege Perez scammed $40 million from Hispanic investors, telling them they would receive returns of up to 120 percent on their investments, the South Florida Sun-Sentinel reported Thursday.
Perez is facing criminal charges and a lawsuit filed by the U.S. Securities and Exchange Commission.
"To gain the trust of prospective investors, Perez … bolstered his own image with lavish spending, including extensive personal use of limousines, extravagant dinners and bodyguards," the SEC lawsuit states.
Investors' money, Perez said, would go fund a jewelry business and pawn shops. Instead, it went to personal use, including $1 million given to family members, a $3.2 million home and a car collection valued at $400,000, the lawsuit claims.
Court papers say Perez even used fake diamonds to convince investors his business was legitimate.
The SEC lawsuit further alleges that in at least one other instance, Perez showed diamonds to a potential investor and claimed they were collateral for his investment.
"In reality, the diamonds did not secure the investments, and the purported diamonds in the safety deposit box were fake," the suit says.
