Verdugo Enterprises has been ordered to pay restitution and administrative penalties by the Arizona Corporation Commission for defrauding Hispanic Christian congregations in a multimillion-dollar investment scheme.
According to the Corporation Commission, Verdugo Enterprise LLC, doing business as Verdugo Gift Company, Isaias M. Verdugo, Maria G. Verdugo, Mario C. Verdugo Jr., Filemon G. Caballero and others raised over $6.5 million from at least 377 investors, most of whom were Arizona residents.
The Corporation Commission found that the fraudsters solicited investments primarily from Hispanic Christian churches and/or their congregations. They told their victims that Verdugo Gift Company was raising investment capital to purchase products for the purpose of fulfilling online orders. Investors were promised 10 to -20 percent interest.
The Corporation Commission found that the respondents misrepresented that their investments were guaranteed and failed to disclose that a portion of their investment funds were used to pay commissions and/or used to fund the purchase and operations of other companies. Ultimately, they failed to pay most investors back.
The Corporation Commission ordered Verdugo Gift Company and Isaias M. Verdugo to pay, jointly and severally, $6,174,398 in restitution. The Commission ordered Maria G. Verdugo to pay $121,900 in restitution, Mario C. Verdugo Jr. to pay $264,660 in restitution and Filemon G. Caballero to pay $227,185 in restitution.
The Corporation Commission ordered the respondents to pay the following in administrative penalties:
Verdugo Gift Company: $150,000
Isaias Verdugo: $150,000
Mario Verdugo: $15,000
Maria Verdugo: $10,000
Filemon Caballero: $10,000