US man accused of snaring Venezuelan dioceses in Ponzi-like scheme
Securities and Exchange Commission claim an investment adviser defrauded Catholic dioceses and clergy of millions
The U.S. Securities and Exchange Commission filed a complaint last week accusing a former investment adviser of defrauding Catholic dioceses and clergy in Venezuela out of millions of dollars in a Ponzi-like scheme.
The SEC filed a 16-page complaint May 28 at the Florida Southern District Court alleging that Andrew Jacobus and two companies he controlled misappropriated more than $17 million from 40 clients, most of whom were Venezuelan nationals, including elderly people.
The complaint did not name the Venezuelan clergy or dioceses who were among the defendants’ clients, but said they lost around $3.2 million in misappropriated funds.
The Wealth Adviser, a digital business-to-business publication, said its efforts to reach Jacobus for comment were unsuccessful and court filings did not show whether he had retained legal counsel.
The SEC complaint alleged that Jacobus raised around $39.7 million from clients beginning at least from May 2015 and ending April 2024. The SEC said the clients thought they were investing in securities with the promise of a high return.
The SEC accused the 62-year-old Fort Lauderdale resident of using two firms, Finser International Corporation and Kronus Financial Corporation, to sell limited partnership interests in the Corfiser SIMI Fund (renamed the Kronus High Yield Fund in 2018), which he presented as investing in companies making their first public stock offerings, known as IPOs.
IPOs are attractive to investors because if the company grows they potentially receive significant returns. Limited partners typically contribute capital funds but have no management role.
The SEC claimed that Jacobus told at least two clients that the Corfiser SIMI Fund would offer annual returns of 12%, significantly above the long-term average returns of similar funds. The complaint said company newsletters “continually reflected fictitious positive returns” for the fund, including after it was renamed.
Jacobus, who has around 30 years of global asset management experience, has longstanding ties to Venezuela.
In 2001, he established a currency exchange provider in the Latin American country and began also offering its clients advisory services from 2010. According to the SEC, he largely left the currency exchange business in 2017.
The SEC alleged that between 2015 and 2024, Jacobus and his two firms misappropriated over $17.3 million of client funds designated for investment in securities, using the money to make payments to unrelated recipients.
“Instead of investing clients’ funds as promised, Jacobus, Finser, and Kronus collectively misappropriated at least $17.3 [million] from clients during the relevant period,” the complaint said.
“This includes misappropriating approximately $3.2 million from Catholic Church clergy in Venezuela and various Venezuelan Catholic dioceses and approximately $3.5 million from certain clients’ brokerage accounts.”
“Jacobus, Finser, and Kronus did so by directing client deposits into 11 U.S.-based bank and brokerage accounts and two U.K.-based bank accounts over which they had sole control and by accessing certain client brokerage accounts to which, unbeknownst to the clients, Jacobus had login access.”
Venezuelan clergy and dioceses may have been attracted to investing in U.S. dollars as a way of shielding funds from the country’s economic turbulence, which has made holding assets in the local currency risky.
But according to Robert Warren — an assistant professor of accounting at Radford University, a retired IRS investigator, and an expert in theft and fraud in ecclesiastical contexts — dioceses investing in any project should perform “basic due diligence” and invest with “major investment firms” rather than individuals promising high returns in order to avoid the prospect of fraud.
According to the SEC, misappropriated funds were used to pay for Jacobus’ mortgage, property taxes, real estate purchases, and travel costs, as well as luxury vehicles.
The commission also alleged that through the two companies, Jacobus made around $7.8 million in Ponzi-like payments to at least 25 clients and other investors, while paying himself a salary of around $4.1 million that he did not disclose to clients.
A Ponzi scheme — named after the conman Charles Ponzi, who operated in North America in the 1920s — is a scam in which earlier investors in a fund are paid using the money from later investors. Investors are drawn in through the promise of high returns at low risk.
The complaint said that Jacobus stopped paying some clients their promised returns on investments around 2021.
“Between January 2022 and April 2022, several clients received emails purporting to be from an entity which Jacobus testified was Kronus’s offshore law firm,” the document alleged.
“The emails (which contained evident typos) explained that requests for account closures would not be honored for a 12-month period.”
“In fact, the law firm had not sent the email and it had never used the particular email address from which the emails were sent. The domain name used in the purported offshore law firm’s emails was registered to Jacobus.”
The return of any client funds ended by mid-2023 and Jacobus stopped communicating with clients, the SEC complaint said.
The SEC is seeking permanent injunctions against Jacobus and the two firms, which were dissolved in September 2024, as well as a ruling requiring the defendants to return any money they made illegally with extra interest and pay fines.
The federal government agency is also appealing for a court order to stop Jacobus from running similar schemes in the future.
The SEC (at least pre-DOGE) has regularly brought in more in fines and disgorgements than its annual budget, many times over. Some of the most successful frauds are when there is a connection of trust between the fraudster and the victims (Jewish, LDS, in recent cases and now, apparently Catholic as well as ethnic bonds).