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Former head of anti-fraud company ordered to pay nearly $1.5M for defrauding investors

On Behalf of | Oct 21, 2022 | Investment Loss

The Securities and Exchange Commission said it has obtained a final judgment against a Florida man who engaged in a fraudulent securities offering, reports Financial Advisor.

Lev Parnas of Boca Raton was charged along with his co-defendant David Correia of West Palm Beach with raising over $2 million from investors by making false and misleading representations and then misappropriating the funds to pay for their personal expenses.

According to the commission, Parnas and Correia made the bogus claims about their company, Fraud Guarantee. They allegedly told investors that their money would be used to develop products to help customers recoup losses from investment or consumer fraud.  Instead, the investment funds were used to pay for a lavish lifestyle that included travel, cars, jewelry, and visits to casinos. According to the SEC’s complaint, Parnas and Correia falsely told potential investors they had raised millions of dollars from other investors and were also putting hundreds of thousands of dollars of their own money into Fraud Guarantee, which never became operational.

Last week the U.S. District Court for the Southern District of New York entered a final consent judgment against Parnas for his role in the scheme. He was ordered to pay disgorgement of $1,400,746 for his ill-gotten gains, and prejudgment interest of $378,844.76. Under a partial judgment entered in May, Parnas was also permanently enjoined from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  In April 2021, the SEC entered a final consent judgment against Correia that ordered disgorgement of $43,650, representing his ill-gotten gains, and prejudgment interest of $10,406.

Prosecutors also announced criminal charges against Correia and Parnas in the case in September 2020. Correia pleaded guilty the following month and was sentenced to a year in prison. Parnas, a former associate of ex-New York City Mayor Rudy Giuliani, was sentenced in June to 20 months in prison for campaign finance, wire fraud and false statements offenses that included the Fraud Guarantee scheme.

Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. We bring a unique level of knowledge and experience when representing the rights of investors, including resolving cases through arbitration and litigation when necessary. If you think your financial professional or firm engaged in misconduct that caused you losses, contact Lewitas Hyman at (888) 655-6002 or through our online contact form at for a no-cost evaluation of your matter.