Port Charlotte Vacant Lots Part of Ponzi Scheme

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The Securities and Exchange Commission charged a prominent Miami couple on Wednesday with operating a $135 million Ponzi scheme that was built on sales of Southwest Florida lots with low monthly payments, mostly marketed to Hispanics through slick television ads.


Operating as Royal West Properties Inc., Gaston Cantens, 71, and his wife, Teresita, 73, would then re-package the retail monthly mortgage payments they received on the lots for larger investors looking for a yield, a common practice. This group was promised yields ranging from 9 percent to 16 percent per year. Selling off the paper from already-sold lots allowed Royal West to keep expanding.

But when Royal West's fortunes went sour as mortgage holders defaulted, the Cantenses allegedly began using money from new investors to pay off older ones in a classic Ponzi scheme, said Eric Bustillo, regional director of the SEC's Miami office.

The lot investors still have their now-devalued lots, assuming they did not default. But the yield investors are "likely only to receive pennies on the dollar after promises were made and broken," said Miami attorney Peter F. Valori.