20 years’ prison for fraudster behind $150m scheme that lost islanders thousands

Thursday 18 April 2019

The architect of a $150million Ponzi scheme that lost some Jersey investors their life savings has been sentenced to 20 years behind bars.

Antonio Carlos de Godoy Buzaneli (57) was handed his jail term in the US District Court of Minneapolis earlier this month.

He was the boss of the Miami-based parent company of Guernsey’s collapsed Providence Investment Fund (PIF), which was marketed to elderly and vulnerable Jersey customers by ex-financier Chris Byrne.

Pictured: Providence was the fraudulent scheme marketed by Chris Byrne, who was convicted last year.

Last year, Byrne was sentenced to seven years’ imprisonment for his involvement in the scheme, which saw clients of his company, Lumiere Wealth, conned victims including an elderly French couple, a pensioner and a retired pensioner out of a total of £2.7million.

That was just a small fraction of the overall impact the scheme had on investors around the world, however.

According to documents filed in court, total losses incurred through Buzaneli’s Ponzi scheme stand around $150million - $85million of which came from affiliates opened in Guernsey and Hong Kong alone. In the US, there were more than 500 victims.

The scheme involved purported ‘Brazilian factoring’ – a transaction in which accounts receivable are purchased at a discount.

Those marketing the scheme told investors that Brazilian consumers tend to write ten separate post-dated cheques of $100 – one per month – to pay for groceries, electronics and other goods worth $1,000.

Pictured: The Providence scheme lost investors in affiliates in Guernsey and Hong Kong alone $85million.

Providence said it would then buy these post-dated cheques from the retailer for $820, meaning that it would be able to gain a profit of $180 once the cheques mature.

Investors were told that the money they gave would be used to fund a Brazilian subsidiary of Providence that would engage in this process, generating returns for them.

But the court heard that Buzaneli – along with co-conspirators Jose Manuel Ordoñez Jr (48) and Julio Enrique Rivera (62) – instead used this money to make Ponzi-style payments to other investors and commission payments to its global network of brokers.

They were also said to use the money for other companies they controlled, including as a catering company and food truck operated by Buzaneli’s wife.

Speaking after the sentencing, US Attorney Erica MacDonald commented: “Antonio Buzaneli was the primary architect of a $150 million Ponzi scheme that targeted hundreds of victims worldwide, many of whom were elderly and vulnerable. Some victims lost their retirement savings, others lost the ability to provide a college education to their children or grandchildren.

“For these egregious crimes, Mr. Buzaneli will spend the next 20 years behind bars. I applaud our law enforcement partners for their steadfast efforts in seeking justice for the victims.”

Ordoñez was sentenced in January this year to 120 months in prison, while Rivera was sentenced on Tuesday. His sentence is yet to be made public.