SAN ANTONIO – A Kendall County man swindled millions of dollars from retired San Antonio police officers and other first responders as part of a multi-million dollar Ponzi scheme, according to a lawsuit filed this week by investigators from the Securities and Exchange Commission.
The lawsuit, which was first reported by the San Antonio Express-News, accuses 47-year-old Victor Lee Farias of carrying out the fraudulent investment scheme from 2013 through January of last year.
Farias told investors their money would be spent on aircraft engines and other parts which would then be leased or resold to the major airlines, according to the lawsuit.
Investors, many of whom were retired first responders, were promised a return on their investments of between 10-12 percent per year, the suit states.
While Farias spent a small portion of the money on its intended purpose, investigators allege he misspent millions of dollars to pay investors Ponzi-like returns, invested in a friend’s convenience store project and misappropriated millions of dollars for his personal use.
“As new investor funds dried up, Farias deceived at least one investor with the lie that he was taking IAL (Integrity Aviation & Leasing) public in an initial public offering, so he could repay all investors, and that he was working with the SEC on the offering. To support that lie, he sent a carefully cropped photo of the SEC’s investigative subpoena to that investor, as proof of his communications with the SEC, and blamed the SEC for the alleged delays in the IPO process,” the lawsuit claims.
Since at least 2015, IAL did not purchase a single aircraft engine, the suit states.
Court records show Farias’ company was able to bring in slightly over $14 million from 88 investors in at least five states.
The alleged victims invested money in the form of promissory notes that ranged from $1,000 to $600,000, according to the suit.
One alleged victim, a retired SAPD officer, invested $531,000, the suit claims.
Farias did not respond to a request for comment Friday at his last known address, an upscale home in Fair Oaks Ranch.
A background check of IAL turned up two addresses in Boerne: a rented mailbox inside a UPS store and an office at a three-story business complex downtown.
The marquee at the business complex included no indication that IAL had office space there.
The lawsuit asks the court to require Farias to discharge “all ill-gotten gains” from the scheme, require him to a pay a fine and bar him from issuing certain securities in the future.
A review of federal records Friday showed that Farias has not yet been criminally charged.
The suit claims Farias is 46, but a background check revealed that he is actually 47.