The son of incumbent Mina, Iloilo Mayor Lydia Grabato and three others were charged by the US Securities and Exchange Commission (SEC) for allegedly running a $600-million (P35 billion) Ponzi-like property scam that defrauded thousands of investors, including hundreds of retirees, in the United States.
Named in the complaint were New Jersey-based luxury property firm National Realty Investment Advisors LLC and former executives Rey Grabato II, Daniel Coley O’Brien, Thomas Nicholas Salzano, and Arthur Scutaro.
Grabato also is the son of Rey Grabato, who also served as mayor of the municipality.
A Ponzi scheme is a type of scam that generates “returns” using money collected from newer investors instead of any legitimate investment activity. National Realty, which promised profits of up to 20 percent, told investors it would use the money to buy and develop real estate properties.
“In reality, payments were being made from the investors’ own funds,” Thomas Smith Jr., associate regional director of enforcement in the SEC’s New York regional office, said in a recent statement.
The company was also accused of using investors’ money to finance personal luxury purchases by an executive’s family and to pay a reputation management firm to “thwart investors’ due diligence of the executives.”
Bankruptcy
It also alleged the firm manipulated its financial documents and other marketing materials that were shown to investors to create the false appearance the…
