The FBI released the below:
Andres Fernandez was a smooth-talking concert
promoter who told people he could make them wealthy investing in the glamorous
industry.
While
he claimed he couldn’t give too much information on the business, he did
promise up to a 100% return on investment.
Instead,
his more than 50 investors were swindled. Victims lost more than $20 million,
ranging from $5,000 to $7 million per victim. Fernandez and an associate lived
on that money and re-paid prior investors in a Ponzi-like scheme.
Fernandez
actually did do some concert promotion work, mostly working with small venues
in the Orlando, Florida, area. He even brought some of his investors to the
concert venue where he worked to convince them he was legitimate. He lied to
those investors about grand plans to expand to stadium-size concert venues and
book famous artists like Pitbull and The Weeknd.
“He
produced lots of completely fraudulent documents that he gave to investors,
like fake Ticketmaster contracts or contracts with artists,” said Special Agent
Kerrie Harney who investigated this case out of the FBI’s Tampa Field Office.
Fernandez’s
early investors were his friends and neighborhood acquaintances. One of his
initial investors, Edison Denizard, got good returns and started working with
Fernandez to bring in even more victims. Some of Denizard’s contacts had
millions of dollars to invest, allowing the men to expand the scheme, which
began in March 2016 and went on for a little over a year.
“The average return for a
promoter is about 10%, but they were telling their investors they’d get
50%-100% return on investment,” Harney said. “They used the whole mystique of
concerts and the music industry and took advantage of the fact that the average
person doesn’t know how it works.”
In
addition to forging a personal connection with the investors, Fernandez used a
frequent tactic of Ponzi schemers. He gave his investors an initial quick
payout a few months after the initial investment. He’d then convince them to
re-invest for a longer term, promising higher returns that never came.
“They
got a little taste of a return, and he convinced them to continue,” Harney
said.
But
like all Ponzi schemes, it came crashing down when Fernandez ran out of funds.
One of his investors got a lawyer, who was quickly able to figure out that
their client had been a victim of fraud.
After
getting a subpoena to view Fernandez’s and Denizard’s bank records, it was
clear they were involved in a Ponzi scheme.
Some
of the investors lost a lot of their money, raiding college funds and 401(k)s
to get in on the investment. While the government is using the asset forfeiture process to
try to return some money, most victims will only receive a small fraction of
what they lost.
Harney suggests would-be
investors be very careful about researching investments. Fraudsters often have
sophisticated pitches and can show realistic documents. Vet everything through
a third party and ask lots of questions before giving anyone money.
One of the biggest
red flags is if someone offers you an unreasonably high return on your investment or is
secretive about the investment, as Denizard and Fernandez were.
“It’s really a
cautionary tale,” Harney said. “This scam hurt a lot of families who have lost
a lot of money.”
Fernandez pleaded
guilty to wire fraud and was sentenced to 10 years last January. Since so many
of the victims were in the Orlando-area, the judge called Fernandez “Orlando’s
Bernie Madoff” at his sentencing hearing, which many of his victims attended.
Denizard pleaded
guilty to conspiracy charges. In February 2021, he was sentenced to more than
four years in prison.
“They maliciously preyed on people to get their money under false pretenses, and many victims lost a significant amount of their savings,” Harney said. “We have to make sure people aren’t victimized like that, and when they are, that the criminals are brought to justice.”
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