Montecito Man Sentenced to 3 Years in Federal Prison for Facebook, Twitter IPO Fraud that Caused $3.4 Million in Losses to Investors
LOS ANGELES – A Santa Barbara County man was sentenced today to 36 months in federal prison for orchestrating a years-long scheme that defrauded investors out of more than $3.4 million with false promises to use their money to purchase shares of Facebook and Twitter prior to the companies’ initial public offerings.
Efstratios “Elias” Argyropoulos, 73, of Montecito, was sentenced by United States District Judge George H. Wu, who also ordered him to pay $3,416,628 in restitution to his victims. Argyropoulous pleaded guilty in June 2019 to one count of wire fraud.
From October 2010 to October 2015, Argyropoulos was the president and sole shareholder of Prima Ventures Corp., a Santa Barbara-based financial services firm. Argyropoulos represented to investors that he had access to “amazing” investment opportunities that would provide a high rate of return on any money invested.
During the course of the scheme, Argyropoulous misled investors by telling them that he would pool their money to purchase pre-IPO shares of companies such as Facebook and Twitter. He also falsely told investors he had access to good investment opportunities in companies such as Alibaba, Etsy, and E-Waste.
Argyropoulos further told investors that he and Prima Ventures were licensed brokers, when, in truth, neither he nor Prima Ventures was licensed by the Securities and Exchange Commission or any other regulatory authority to sell securities.
Instead of purchasing the stocks, Argyropoulos diverted the investor funds for other uses, such as day-trading in stocks unrelated to the promised investments, and personal expenses such as gambling, cars, insurance bills, travel, and his legal expenses arising out of an investigation into his activities conducted by the SEC.
Some of Argyropoulous’s victims met him at church gatherings, where he forged relationships with them and then used these relationships to recruit other unsuspecting investors, such as the victims’ work colleagues.
Argyropoulos also admitted to willfully violating a January 2015 court order in a lawsuit brought by the SEC, which was based on the fraudulent Facebook and Twitter scheme. The injunction prohibited Argyropoulos from selling fraudulent investments and acting as an unlicensed broker.
In total, Argyropoulous cheated 130 victims out of more than $3.4 million.
The FBI investigated this matter. The SEC provided substantial assistance.
This case was prosecuted by Assistant United States Attorney Scott Paetty of the Major Frauds Section.