Gaston Cantens, a prominent Cuban-American businessman who ran development firm Royal West Properties, pleaded guilty yesterday for his part in a $135 million Ponzi scheme, the Miami Herald reported, the same day he was charged. It’s the second plea agreement he’s reached on charges, and this one includes a prison sentence of up to five years.
When the real estate market crashed, Cantens misled investors about the financial performance of his assets and began paying off old investors with money collected from new investors. To lure investors, Cantens used South Florida mortgages and properties as collateral to guarantee their money was safe. Little did those investors know that he often used the same property repetitively to reassure multiple people.
Court documents show that more than 150 investors lost $47 million on $135 million of investments between 2003 and 2008. “After nearly 30 years in business, unfortunate circumstances caused him to make serious mistakes for which he is accepting full responsibility,” said Bruce Lehr, Cantens’ attorney. “Throughout this process, it was always clear that Mr. Cantens’ actions were not for personal gain but were actions attempting to save a struggling real estate business at the time.” [Miami Herald]