Federal authorities on Tuesday arrested a man in Hidalgo County on allegations that he defrauded and bilked investors in Long Beach, California out of more than $1 million.
Abel Aureliano Galvez Carrillo, who was charged with wire fraud, money laundering and structuring transactions to evade reporting requirements, made a first appearance Tuesday in front of U.S. Magistrate Judge Nadia S. Medrano in McAllen federal court, where the judge ordered him temporarily held without bond, court records indicate.
A federal grand jury in California indicted Galvez on June 8.
Federal prosecutors there accuse Galvez of operating businesses called Group 7 LLC and Group 7 Asset Services Group LLC to solicit investors to participate in a year-long $1 million-plus trade program that purportedly used the Royal Bank of Canada to conduct business, according to the indictment.
Potential investors were told the program was fully funded and trading, according to the allegations.
“Defendant Galvez told investors that the minimum investment was $1 million and the maximum was $10 million for a total of $100 million in the Trade Program,” the indictment said.
Prosecutors say Galvez described the program as being a high-yield program with compounding returns that included a payout of a portion of the profits every two weeks.
“According to defendant Galvez, the principal and the bulk of the profits were to be retained and added to the original principal earning compounding returns that grow over the life of the Trade Program, resulting in a 700% net return on principal,” the indictment said. “Defendant Galvez further claimed that the profits were to be split between Group 7 (30%) and the investor (70%).”
The indictment alleges the scheme began at least in January 2018 and continued to until about October 2018 in Orange and Los Angeles counties in California and that he knowingly defrauded investors by making materially false and fraudulent representations.
“Defendant Galvez promised that investor funds would be placed in a ‘Custodial Trust Account’ that would never be moved by defendant Galvez, but just placed on an Administrative Hold and ‘returned 100%’ to the investor at the end of the 12-month period,” the indictment said.
He’s also accused of promising direct and immediate wire transfers of lump-sum profits and principal at the end of the program through a client-attorney trust account at JP Morgan Chase Bank.
“However, defendant Galvez never operated the Trade Program,” the indictment states. “Instead of holding the investor funds in a Custodial Trust Account as promised, defendant Galvez took the investor funds for his own personal use, including purchasing luxury cars and withdrawing over $400,000 in cash.”
The indictment alleges that on April 11, 2018, he transferred $1.25 million from a California residents bank account into the trade program for an investment to an account at a Las Vegas bank.
Prosecutors allege he transferred $250,000 from that account to one that he controlled and used nearly $1 million from the trade program to purchase property in California.
Following hearings scheduled for next week, Galvez will likely be extradited to California to face the charges.
