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Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of New York

Monday, September 18, 2017

Peruvian National Sentenced In Manhattan Federal Court To 12 Years In Prison For Running Million-Dollar Ponzi Scheme

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that PEDRO JARAMILLO, a/k/a “Enrique Jaramillo,” was sentenced today to 12 years in prison for commodities fraud and wire fraud charges stemming from his scheme to defraud more than two dozen investors, including retirees, working professionals and manual laborers from Peru and countries in Latin America, of more than $1.2 million through a Ponzi-like scheme.  Many of JARAMILLO’s victims, many of whom submitted letters to the Court or spoke at JARAMILLO’s sentencing, lost their life savings to JARAMILLO’s scheme, including their homes. 

In imposing today’s sentence, Judge Laura Taylor Swain described JARAMMILLO’s conduct as “calculated and utterly despicable” and noted the “profoundly devastating impact” of the scheme on JARAMILLO’s victims. 

JARAMILLO was arrested on December 2, 2016, and has remained detained since that date.  On April 7, 2017, JARAMILLO pled guilty to commodities fraud and wire fraud charges before Judge Swain.

Acting U.S. Attorney Joon H. Kim said:  “Pedro Jaramillo lured investors with a slick video pitch complete with iconic New York scenes and music.  He purported to be ‘a proven winner’ who promised high returns but he was just a swindler, spending investors’ money on himself and to repay early investor redemptions.  Many victims – including retirees, working professionals, and manual laborers – lost their life savings, and Jaramillo now faces the substantial term in prison his crime merits.”

According to the Complaint, the Indictment, and other statements made in open court:

Beginning in at least January 2014 through in or about December 2016, JARAMILLO solicited more than $1.2 million in investments from more than two dozen investors, primarily for the purported purpose of investing in commodity futures contracts, by falsely representing, orally and in writing, that investor monies would be invested in short-term commodities contracts with a guaranteed rate of return.

To help attract investors, JARAMILLO maintained an office on Wall Street (the “Wall Street Office”) where he met with prospective investors to tout his prior success and relationship with a prominent international bank (the “Global Investment Bank”).  JARAMILLO also starred in a video (the “Video”) set to the soundtrack of Frank Sinatra’s “New York, New York.”  The Video featured a series of images of Wall Street, the New York Stock Exchange, and JARAMILLO in front of the Wall Street Office.  In the video, JARAMILLO told prospective investors that he was a “proven winner” and “trusted partner” who would maintain individually managed and federally insured accounts for each client.  JARAMILLO told prospective investors that these safeguards would ensure that prospective investors would “be protected against fraud and brokerage failure.” 

In truth and in fact, JARAMILLO not only failed to create individual investment accounts, he failed to use investor funds to make any legitimate investments, instead diverting the majority of funds to his own use or to repay earlier investors whose redemption requests could not be forestalled.  In total, JARAMILLO diverted more than $700,000 to his own use in the form of cash withdrawals and debit card purchases used to fund his lifestyle, including thousands of dollars on three vacations to Disney World for JARAMILLO, family, and guests. 

To hide his misappropriations and continue to fund his personal lifestyle, JARAMILLO also used new investor funds to pay back other investors in a Ponzi-like fashion.  In total, since January 2014, JARAMILLO distributed more than $200,000 back to investors from funds deposited by new investors.  During that time, JARAMILLO also diverted more than $100,000 of investor funds out of bank accounts he controlled in the United States to foreign bank accounts, including in Peru where JARAMILLO is a citizen.

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In addition to the 12-year prison sentence, JARAMILLO, 49, a Peruvian National who was residing in Queens, New York, before his arrest, was sentenced to 3 years of supervised release.  The Court further ordered JARAMILLO to forfeit the proceeds of the scheme and to pay restitution in an amount to be determined.

Mr. Kim praised the work of the Federal Bureau of Investigation. 

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.  Assistant U.S. Attorney Andrea M. Griswold is in charge of the prosecution.  

Financial Fraud
Press Release Number: 
Updated September 18, 2017