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Chula Vista Man Admits Defrauding Investors of Over $4 Million
Paolo Roberto Flores, a resident of Chula Vista, California, pleaded guilty in federal court to investment fraud, admitting to defrauding investors of over $4 million through lies and deception.
According to court documents, Flores made false statements about the success of his prior investments and promised to do the same for new investors. He agreed to invest their funds in cryptocurrency and take 20 percent of any profitable trades. He also told potential investors that he had effective risk mitigation measures in place to limit potential losses.
Flores sent frequent text messages to investors, purporting to document profits resulting from his cryptocurrency trading. Based on Flores’ claim of consistent profits, some clients decided to increase their investments.
However, when his investments started declining consistently, Flores took multiple steps to conceal his losses from investors. He doctored account statements to falsely show profits that did not exist. For example, on July 8, 2022, Flores sent a screenshot to investors that purported to be an ‘Assets Overview’ page from trading platform BYBIT. He had doctored the screenshot to show an overall asset amount of approximately 69.06515482 BTC (or approximately $1,502,431.64 based on the closing price of $21,753.83 for one BTC on July 8, 2022). In reality, the account had a nominal balance.
Later, when investors tried to withdraw funds as Flores had promised, Flores falsely claimed that BYBIT had frozen the account in which investor money had been deposited. He provided a series of apparent screenshots of emails, which he claimed were his communications with BYBIT. Instead, he had secretly created a new account, then initiated a user request through BYBIT to disable the login for the new account claiming, ‘suspicious account activity.’ After BYBIT blocked the account as requested, FLORES logged into the new account to get the error message. He provided the error message, ‘This account has been banned,’ to the investors to support his fraudulent claim that BYBIT had banned the account.
According to court documents, Flores obtained at least $4,781,248 from victim investors because of his false statements and fraudulent documentation. At least 15 people gave amounts from $50,000 to $1.6 million. Flores used the proceeds of his scheme to purchase a 2021 Tesla Model S and a 2022 Land Rover RR, which he boasted about on his Facebook page.
The U.S. Attorney’s Office is committed to pursuing those who commit fraud for personal gain, said U.S. Attorney Tara McGrath. ‘If you believe you have been the victim of a scam or fraud scheme, contact law enforcement for help.’
In addition to the investment fraud, Flores admitted that he attempted to commit mortgage fraud. In July 2023, Flores executed an application to refinance a Veteran’s Administration mortgage with Rocket Mortgage LLC in the amount of $1,086,000 for his residence. In connection with the application, Flores made false statements about his employment status and income, and supported those false claims by submitting fabricated pay stubs to the mortgage lender.
Flores was ordered to appear for sentencing before U.S. District Judge Barry Ted Moskowitz on January 23, 2025, at 1:30 p.m.
Defendant Information:
Defendant: Paolo Roberto Flores
Criminal Charges: Investment Fraud
City and State: Chula Vista, California
Crime Date: 2022
Sentence: Sentencing scheduled for January 23, 2025
Dollar Amounts: $4,781,248 obtained from victim investors
Additional Information: At least 15 people gave amounts from $50,000 to $1.6 million, and Flores used the proceeds of his scheme to purchase a 2021 Tesla Model S and a 2022 Land Rover RR.
Key Facts
- State: California
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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