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By Cari Hachmann
The Securities and Exchange Commission is suing a San Clemente resident, Daniel Pacheco, who is accused of conducting a multimillion-dollar pyramid scheme.
The SEC’s complaint, filed on May 22, alleges that from January 2017 through March 2018 Pacheco conducted a fraudulent, unregistered offering of securities through two California-based companies he controls: IPro Solutions, LLC and IPro Network, LLC.
Pacheco allegedly raised more than $26 million through the scheme, according to the SEC, by selling instructional packages that provided lessons on e-commerce.
Investors involved could earn extra points or cash commissions by recruiting new members to the network, a theme common among pyramid schemes.
The San Clemente man allegedly used investors’ funds to buy a $2.5 million home and a Rolls Royce.
The SEC noted Pacheco’s fraudulent use of funds hastened his company’s collapse, as he was unable to pay off his investors’ cash commissions and other bonuses.
The SEC’s complaint, filed in U.S. District Court for the Central District of California, charges Pacheco with violating the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint also named seven entities or people who allegedly possess funds belonging to IPro’s investors, but they have not been accused of any wrongdoing, according to the SEC—CH