The SEC has filed a complaint against Diana Mae Fernandez, who allegedly ran a fraudulent securities offering involving cryptocurrencies, companies, and real estate. The SEC claims she used investor funds for personal expenses and Ponzi payments.
The Securities and Exchange Commission (SEC) has charged a woman with running a fraudulent securities offering that involved cryptocurrencies, various companies, and luxury real estate. The SEC alleges that the woman used the investor funds for her personal expenses and to pay off earlier investors in a classic Ponzi scheme.
According to a recent litigation release, the SEC has filed a complaint against Diana Mae Fernandez, 37, who operated under the names “The Self-Made Success” and “Diana Mae K., LLC”. The SEC claims that Fernandez solicited investors, mainly from church groups and entrepreneur-focused social networks, and promised them high returns, up to 63%, by investing their funds in cryptocurrencies, various companies, and luxury real estate.
However, the SEC alleges that Fernandez lied about her experience and success and did not invest the funds as she claimed. Instead, the SEC says that she commingled the investor funds with her own and used them for personal expenses, such as everyday living costs, luxury hotel stays, cash withdrawals, and Ponzi payments to earlier investors.
The SEC estimates that Fernandez raised approximately $364,000 from at least 20 investors.
The complaint, filed in the Northern District of West Virginia on December 21, 2023, details how Fernandez misrepresented her credentials and achievements to potential investors. The SEC says that she claimed to have over 15 years of investing experience and boasted of having raised $100 million across 25 countries, assertions that the SEC has declared false. She also directed investors to transfer money directly to her bank account or through PayPal, maintaining sole control over these funds.
The SEC alleges that Fernandez violated the antifraud provisions of the federal securities laws and seeks permanent injunctions, civil penalties, and disgorgement of ill-gotten gains with prejudgment interest. The SEC also seeks to bar Fernandez from participating in any future securities offerings.
Fernandez’s actions have also led to criminal charges. According to a Justice Department statement, U.S. prosecutors charged her with investment fraud in July 2023. She reportedly defrauded multiple victims, including one from Marion County, West Virginia, of over $300,000. When it was time to deliver the investment returns, Fernandez falsely claimed that dividends couldn’t be paid, using the investors’ money for her benefit.
Fernandez was arrested in Serbia, where she is being held pending extradition. She faces up to 20 years in prison for each of the five counts she has been charged with.
This case highlights the increasing vigilance required in the digital investment landscape, particularly in areas like cryptocurrency, where regulatory frameworks are still evolving. The SEC has issued several alerts and advisories to warn investors of the risks and challenges of investing in crypto-related products and platforms.
The SEC also urges investors to do their due diligence and research before investing in any securities offering, especially those involving cryptocurrencies or promising high returns.
