A Florida investment scheme that bilked thousands of people has finally settled with federal regulators, but the money tells only part of the story.

The SEC and EmpiresX Corp reached a $34.8 million settlement in May, comprised of $32.2 million in disgorgement and $2.7 million in prejudgment interest. The company, now under court-appointed receivership following a class-action lawsuit filed in June 2022, won't actually pay the SEC directly. Instead, a court receiver will hand over everything it recovers from the scheme's assets.

So far, that's roughly $700,000. The receiver holds about $208,000 and knows of another $490,000 frozen by Bank of America in a separate SEC action against EmpiresX co-founder Emerson Pires. The settlement gets approved May 22nd.

This case sits in unusual legal territory. A Ponzi scheme disguised as a multi-level marketing operation is simultaneously wrapped up in a civil class-action, under SEC enforcement, and facing CFTC charges. A jury trial is scheduled for October 30th, 2023, though taking the receivership to trial now appears pointless given the SEC settlement already approved.

The real targets remain elusive.

Pires and the other co-founder, Flavio Goncalves, are fugitives hiding in Brazil. The SEC plans to seek default judgments against both men. When the court approved the settlement, the SEC made clear it would pursue them aggressively. Both men bear joint liability with the company for the disgorgement, restitution, and penalties now owed.

In a related development, Joshua Nicholas—connected to the scheme—settled with the SEC for just over $300,000 in April 2023. More significantly, a default judgment hit Pires and Goncalves on June 21st, 2023, for $45.8 million.

The CFTC's parallel case against EmpiresX has produced no recent developments, leaving questions about how that enforcement action will proceed and what coordination, if any, exists between regulators.

For victims in the class-action, the receivership represents their best hope of recovering anything. The $700,000 in collected funds will be distributed through that process. The SEC settlement essentially strips EmpiresX of whatever assets remain, funneling them into the recovery effort.

Meanwhile, two fugitives abroad face mounting financial liability they're unlikely to ever pay—a common endgame in international fraud cases where enforcement runs up against geopolitical walls. The default judgment against them serves as a financial scarlet letter but carries limited practical weight if they remain in Brazil beyond U.S. legal reach.

🤖 Quick Answer

What was the total settlement amount between the SEC and EmpiresX Corp?
The SEC and EmpiresX Corp reached a $34.8 million settlement in May 2024, comprising $32.2 million in disgorgement and $2.7 million in prejudgment interest. The company, now operating under court-appointed receivership following a class-action lawsuit, will not pay directly to the SEC. Instead, a court receiver will distribute recovered assets from the investment scheme.

How much money has been recovered from EmpiresX assets so far?
As of the settlement announcement, approximately $700,000 had been recovered from the scheme's assets. The court receiver held about $208,000, with an additional $490,000 frozen by Bank of America in a separate SEC enforcement action against EmpiresX co-founder Emerson Pires.

When was the settlement officially approved?

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