SEC charges Puerto Rican co., managing members with fraud
The Securities and Exchange Commission announced charges against Puerto Rico-based Back to Green Mining LLC and its two managing members, José Jiménez-Cruz and Manuel Portalatín, for their participation in a fraudulent and unregistered offering in a purported “green” mining venture.
The SEC’s complaint alleges that, from August 2016 until at least 2020, Back to Green, Jiménez, and Portalatín offered and sold to retail investors in Puerto Rico and at least five US states the opportunity to share in the profits of a purported Colombian gold mining operation.
According to the SEC’s complaint, the offering, which was not registered with the Commission, was part of a fraudulent scheme that raised approximately $2.7 million. Jiménez and Back to Green allegedly placed advertisements promising investors exorbitant returns and presented investors with materials that falsely stated that all permits necessary to mine in Colombia had been obtained.
After the provision of these materials, Portalatín allegedly signed contracts with investors when he knew that they had been misled, the SEC stated.
“This case underscores our commitment to protecting retail investors from unregistered and fraudulent securities offerings that promise fantastic returns and mislead investors about the status of their projects,” said Carolyn M. Welshhans, associate director of the SEC Enforcement Division.
“We have alleged that Back to Green and Jiménez represented to investors that they would receive 40% returns per month, commencing within a few months, when the company was years away from selling anything for profit,” she said.
The SEC’s complaint, filed in US District Court for the District of Puerto Rico, charges Back to Green, Jiménez, and Portalatín with violating the antifraud provisions of the federal securities laws, as well as with directly offering and selling securities in an unregistered offering.
The SEC seeks permanent injunctions, disgorgement of allegedly ill-gotten gains plus interest, and civil penalties against Back to Green, Jiménez, and Portalatín.
Without admitting or denying the allegations in the SEC’s complaint, Portalatín has offered to settle to permanent injunctions from future violations of the charged provisions and from participating in securities offerings not registered with the SEC, and to pay a remedy of $605,462, plus prejudgment interest in the amount of $64,312.25, and a civil penalty of $160,000.
The settlement is subject to the approval of the district court, the regulatory agency stated.
The SEC’s investigation was conducted by Michelle I. Bougdanos and Elisabeth M. Grimm and supervised by David Frohlich and Ms. Welshhans.
The litigation will be led by Paul W. Kisslinger and supervised by Jan M. Folena.
“The SEC appreciates the assistance of Puerto Rico’s Office of the Commissioner of Financial Institutions,” it stated.
