Pyramid Scheme Operators Who Targeted Latino Community Charged With Fraud

Three company officers and 12 promoters behind an international pyramid scheme that officials say targeted the Latino community were charged this week by the U.S. Securities and Exchange Commission, reported the SEC in a press release. Several of the promoters live in Marlborough and Clinton, MA, while others live in Sandy, UT, Duluth, GA and Waco, TX.

The SEC obtained a court order to freeze the assets of the company officers, promoters and other related parties. This Portuguese company, operating under the name Wings Network, claimed to run a multi-level marketing company that offered mobile and digital solutions to customers, which included cloud storage and apps.

Wings Network made its money solely by selling memberships to investors, but did not sell products. The company, said the SEC, recruited new members, with commissions paid to earlier investors with the money from the more recent investors. The scheme raised no less than $23.5 million from thousands of investors. Many investors were Brazilian and Dominican immigrants who live in Massachusetts.

SEC’s complaint says that the Wings Network scheme was orchestrated by Sergio Henrique Tanaka of Sa Paulo, Brazil and Davie, Florida, Carlos Luis da Silveira Barbosa of Lisbon, Portugal and Claudio de Oliveira Pereira Campos of Lisbon, Portugal.

The three officers established a network of lead promoters who recruited new members through social media, where they would post “business meetings” that took place at hotels in Connecticut, California, Florida, Massachusetts, Pennsylvania, Texas, Georgia and Utah. These promoters also opened “training centers” in storefronts, said the SEC.

The SEC alleges that the entities and principals Tanaka, Barbosa and Campos violated anti-fraud provisions of the Securities Act and the Securities Exchange Act, registration provisions of the Securities Act, and promoters violated the Securities Act.