A Montecito man was arrested and faces a federal grand jury indictment that accuses him of running two fraudulent investment schemes and violating a court order prohibiting him from selling securities.
71-year-old Efstratios “Elias” Argyropoulos was arrested at his office in Santa Barbara Wednesday morning by federal agents.
Argyropoulos was arraigned in United States District Court later that day and pleaded not guilty.
Argyropoulos is accused of operating two Santa Barbara investment services firms – Prima Capital and Prima Ventures – and engaging in two fraudulent schemes by soliciting investments in companies such as Facebook and Twitter, as well as investments in a fictitious estate settlement.
In the first alleged scheme, Argyropoulos faces six fraud charges related to false promises to use investor funds to purchase securities, including pre-IPO shares of Facebook and Twitter. Instead of purchasing the stocks, Argyropoulos allegedly diverted the investor funds for other uses, such as day-trading in stocks unrelated to the promised investments and personal expenses, such as his mortgage, car payments and casino debts. According to the indictment, from October 2010 through October 2015, Argyropoulos solicited $4,947,360 from investors victimized in this scheme.
In the second scheme, Argyropoulos faces seven fraud charges for allegedly marketing shares in an investment known as the “Laurence Miles Giant Estate Settlement,” which was also called the “Laurence Miles Trust.” According to the indictment, Argyropoulos falsely told investors that the beneficiary of the Trust was a very ill woman who needed medical treatments and was the heir to a large estate, which was worth more than $1 billion. According to the bogus story, the estate was tied up in probate proceedings and money was needed to cover the heir’s medical expenses. Once the probate proceedings were finished, Argyropoulos allegedly told victims the assets would become available for transfer and investors would receive a large return. There was no estate to be settled and no “ill woman” with large medical bills. According to the indictment, Argyropoulos’ investors lost over $760,000 in the scam.
The final eight counts of the indictment charge Argyropoulos with criminal contempt. The counts allege that Argyropoulos’ solicitation of investments in the Laurence Miles Trust violated the terms of an injunction that Argyropoulos consented to in a suit brought by the Securities and Exchange Commission, which was based on the fraudulent Facebook and Twitter scheme. The injunction prohibited Argyropoulos from selling fraudulent investments and acting as an unlicensed broker.
If convicted of the 13 fraud charges in the indictment, Argyropoulos would face a statutory maximum sentence of 20 years in federal prison for each count. There is no statutory maximum sentence for the eight contempt charges.
The FBI is investigating the case against Argyropoulos.Argyropouos was released on a $300,000 bond and will stand trial on March 20.