SEC v. OPTIMUM INCOME PROPERTY, LLC; OPTIMUM PROPERTY INVESTMENTS, LLC; and FRANK E. LLERAS, No. 3:16-cv-00073-GCM, Western District of North Carolina (Feb. 11, 2016) — Complaint

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION

SECURITIES AND EXCHANGE
COMMISSION,
:
:
:

Plaintiff,
:
:

 Civil Action No.

v.
:
:

OPTIMUM INCOME PROPERTY, LLC,
OPTIMUM PROPERTY INVESTMENTS,
LLC, and
FRANK E. LLERAS,

Defendants.
:
:
:
:

:
:
:

 :

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

 Plaintiff, Securities and Exchange Commission (“Commission”), files its
complaint and alleges that:
OVERVIEW
1. From at least March 2012 through the fall of 2014, Frank E. Lleras
(“Lleras”) and two Charlotte, North Carolina-based companies that he controls,
Optimum Income Property, LLC and Optimum Property Investments, LLC
(collectively, “Optimum”), conducted an offering fraud that targeted investors in
the Dominican Republic and raised more than $2.9 million from at least twenty-
five victims.

2

2. Lleras solicited money from investors by representing, both orally and in a
written agreement with investors, that he would use the funds to purchase
residential homes and condominiums located in Charlotte.
3. Lleras further represented to investors that he would renovate and resell, or
rent, the properties he purchased for substantial profit and take as his fee a
percentage of the investors’ net profit.
4. Lleras’s investment contracts were securities and his representations to
investors were false.
5. Within days of receiving investor funds, Lleras misappropriated large
portions of those funds for his own benefit.  Lleras diverted investor funds to
support his personal lifestyle, including paying more than $1.1 million in credit
card charges; making numerous purchases at luxury retailers; and conducting
hundreds of smaller, personal transactions.
6. Lleras concealed his scheme, and induced additional investments, by giving
investors fake documents, including forged deeds and fictitious property tax
receipts, concerning properties that he falsely told them they owned.
7. With respect to at least three properties, Lleras provided fake deeds to
investors falsely showing that they owned properties that Optimum itself wholly
owned.

3

8. Lleras also provided investors with fake quarterly account statements that
listed the properties supposedly owned by an investor, as well as income from the
sale or rental of the property, Optimum’s management fees, and unrealized profits.
9. These fake documents lulled investors into a false sense of security, and
enticed several investors to make additional investments with Lleras.
10. Beginning in late 2014, after being confronted by a few investors who
questioned their returns, Lleras confessed that he had defrauded investors and
admitted to several investors that he had used funds for impermissible purposes.
     VIOLATIONS
11. Defendants have engaged and, unless restrained and enjoined by this Court,
will continue to engage in acts and practices that constitute and will constitute
violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15
U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. §
240.10b-5].
JURISDICTION AND VENUE
12. The Commission brings this action pursuant to Sections 20 and 22 of the
Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the
Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)]  to enjoin Defendants from

4

engaging in the transactions, acts, practices, and courses of business alleged in this
complaint, and transactions, acts, practices, and courses of business of similar purport
and object, for civil penalties and for other equitable relief.
13. This Court has jurisdiction over this action pursuant to Section 22 of the
Securities Act [15 U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange
Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa].
14. Defendants, directly and indirectly, made use of the mails, the means and
instruments of transportation and communication in interstate commerce and the
means and instrumentalities of interstate commerce in connection with the
transactions, acts, practices, and courses of business alleged in this complaint and
made use of mail and means of instrumentality of interstate commerce to effect
transactions, or to induce or to attempt to induce the purchase or sale of securities
alleged in this complaint.
15. Certain of the transactions, acts, practices, and courses of business
constituting violations of the Securities Act and the Exchange Act occurred in the
Western District of North Carolina.  In addition, Lleras resides in  the Western
District of North Carolina and directed the operations of Optimum from the
Western District of North Carolina.

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16. Defendants, unless restrained and enjoined by this Court, will continue to
engage in the transactions, acts, practices, and courses of business alleged in this
complaint, and in transactions, acts, practices, and courses of business of similar
purport and object.
THE DEFENDANTS
17. Optimum Income Property, LLC (“Optimum Income”) is a Florida limited
liability company formed by Lleras in 2013.  It currently is listed on the Florida
Department of State Division of Corporations’ website as “Inactive.”  Lleras
portrayed Optimum Income as a private real estate investment company that
handled all aspects of real estate investing for investors.
18. Optimum Property Investments, LLC (“Optimum Property”) is a North
Carolina limited liability company formed by Lleras in 2009.  The nature of the
Optimum Property business is described as “real estate investments” in filings with
the North Carolina Secretary of State.
19. Frank Lleras is the control person of Optimum and signed agreements with
investors on its behalf.

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THE FRAUDULENT SCHEME
20. From at least March 2012 through the fall of 2014, Lleras raised more than
$2.9 million from at least twenty-five investors in the Dominican Republic.
21. Lleras solicited investors to give him money by representing to them that he
would use their funds to purchase residential homes and condominiums in
Charlotte, many of which had fallen into foreclosure or otherwise were distressed,
from Fannie Mae, Freddie Mac, and Bank of America.
22. Lleras told investors that the opportunity to purchase the properties stemmed
from his contacts with Bank of America.
23. Lleras further told investors that, after purchasing the properties, he would
either renovate and sell the properties for profit or rent the properties to generate
income for investors.
24. Lleras outlined to investors a process whereby he would form a limited
liability company (“LLC”) in each investor’s name, and then open an account in
the LLC’s name at Bank of America.
25. Lleras told investors that after they wired funds into the LLC bank accounts,
he would use the funds to purchase and title properties in the names of the LLCs.
He explained to the investors that the LLC structure was necessary because the

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investors were not U.S. citizens, and that using the LLCs would minimize their tax
burden.  The LLCs were formed by Lleras in North Carolina.
26.  At least twenty-five investors ultimately invested more than $2.9 million in
Lleras’s fraudulent scheme.
27. The investors primarily consisted of physicians residing and practicing in the
Dominican Republic, many of whom were friends or professional acquaintances
with Lleras’s father-in-law.
28. Each investor entered an Agency Agreement with Optimum.  These
agreements provided that they were governed by North Carolina state law and that
any litigation arising out of the agreements was to take place in North Carolina.
29. Although the agreement was drafted to suggest that the client was selecting a
specific property to purchase from a few presented by Lleras and allowed the client
to discontinue Optimum services, in reality these powers were illusory and the
investors were reliant on Lleras to perform all essential management functions with
regard to the investment.
30. The information that Lleras gave investors to choose a property was
minimal, typically including a photograph, the purchase price, and Lleras’s
projected return on investment.

8

31. Moreover, the investors were foreign nationals residing outside the United
States, most with limited English language skills and no experience in purchasing,
renting, or reselling real estate in the United States.
32. The investors relied wholly on Lleras and Optimum’s efforts to identify
appropriate properties, renovate those properties, and then make a profit by
reselling or renting the properties.
33. Optimum was responsible for all essential functions of the investment,
including the acquisition and maintenance of the properties.
34. Additionally, investors relied on Lleras to decide whether and when to rent
or sell the properties.
35. The agreement also detailed Optimum’s compensation and provided that
Optimum was entitled to ten percent of net profit from rent, and, upon sale of the
property, between five and fifteen percent of the resulting net profit along with a
three-percent sales commission.
36. Defendants’ profits were dependent upon the return on the investments made
by the individual investors.
37. After the investors wired funds to their LLC accounts, Lleras provided them
with purported property deeds and property tax payment receipts for the properties
that they believed they owned.

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38. Lleras also provided investors with quarterly account statements, which
listed the properties purportedly owned by the investors, as well as income from
the sale or rental of the properties, Optimum’s management fees, and unrealized
profits.
39. Contrary to Lleras’s representations, investor funds were not used to buy
investment properties for investors, but instead were used for Lleras’s personal or
unrelated business expenses.
40. Lleras’s personal use of investor funds was contrary to the written and oral
representations he made that investor funds would be used solely for purchasing,
renovating, and maintaining real estate properties for investors.
41. Lleras received more than $2.9 million of investor funds.  Instead of
purchasing properties, as he represented he would do, he (i) used more than $1.1
million to pay bills from American Express; (ii) made purchases at luxury retailers,
such as Cartier, Louis Vuitton, and Christian Louboutin; and (iii) conducted
hundreds of smaller transactions that clearly were personal in nature (e.g.,
purchases at Bye Bye Baby, PetSmart, Starbucks, and Victoria’s Secret).
42. Lleras also provided fake documents to investors to cover up the scheme,
assure them that their investments were secure, and induce them to make additional
investments.

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43. First, Lleras provided investors with deeds for properties that he claimed to
have purchased in their LLCs’ names.  Lleras, however, ultimately admitted to
several investors that he had forged the deeds.
44. At least twelve deeds provided to investors were fabricated.  With respect to
at least three properties, Lleras provided fake deeds to investors falsely showing
that they owned properties that Optimum itself wholly owned.
45. Second, Lleras provided to investors fake receipts purporting to show the
payment of property taxes on the properties.  Because the LLCs did not own the
properties, however, no tax payments were owed or made in their names.
46. Finally, Lleras provided false quarterly account statements to investors.  The
statements listed specific properties that composed the investors’ portfolios, as well
as income from the sale or rental of the properties, Optimum’s management fees,
and unrealized profits along with updated and projected returns.
47. These account statements listed information concerning properties and
resulting income and profits for properties that the investors did not own.
48. The experiences of two investors in Lleras’s scheme are illustrative.  First,
Investor A, a doctor in the Dominican Republic, invested approximately $290,000
with Lleras and Optimum in order to purchase properties in Charlotte.

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49. Investor A first met Lleras in March 2012 when Lleras traveled to the
Dominican Republic to solicit investors and explain the Optimum investment
opportunity.
50. Lleras told Investor A that first he would create an LLC in the name of the
investor and open a Bank of America account in the name of the LLC.  Lleras then
said he would purchase bank-owned properties in the investor’s LLC name, and
either manage the rental of the property or make repairs to the property and sell it
at a profit.
51. Lleras guaranteed a thirty-percent profit to the investor for the resale of
property.  In return, Lleras would keep as his profits five percent of rental income
and between five and fifteen percent of net profit of any resale.
52. Based on Lleras’s representations, Investor A entered into an Agency
Agreement with Optimum and, on July 4, 2012, wired approximately $86,000 from
his bank in the Dominican Republic to his newly opened Bank of America account
in the name of a LLC Lleras created on Investor A’s behalf.
53. Investor A wired the funds to purchase two specific properties identified to
him by Lleras.  Subsequently, Lleras provided Investor A with a deed for one of
the properties that listed Investor A’s LLC as the owner of record.  This deed was
fabricated.

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54. Investor A, unaware that the deed was fabricated and comforted by this
purported evidence of his ownership of the property, agreed to invest more money
with Lleras to purchase additional proprieties.  In 2013 and 2014, Investor A wired
funds on at least three occasions totaling more than $200,000, so that Lleras could
purchase four additional properties on his behalf.
55. Despite Lleras’s representations, Investor A never had title to at least two of
these properties.
56. Investor B, also a doctor in the Dominican Republic, invested approximately
$177,000 with Lleras and Optimum for the purchase of properties in Charlotte.
57. In approximately 2013, Investor B attended a presentation by Lleras in the
Dominican Republic during which Lleras described the opportunity to invest in
real estate properties in Charlotte through Optimum.
58. Lleras told Investor B that first he would create an LLC in the name of the
investor and open a Bank of America account in the name of the LLC.  Lleras then
said he would purchase bank-owned properties in the investor’s LLC name, and
either manage the rental of the property or make repairs to the property and sell it
at a profit.
59. Based on Lleras’s representations, Investor B invested approximately
$177,000 with Optimum in three separate transactions.  Lleras subsequently

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provided two deeds to Investor B that listed Investor’s B’s LLC as the lawful
owner of the properties.  Again, the deeds were fabricated.
60. In late 2014, several investors became concerned about their investments
with Lleras because expected rental payments and profits from sales of properties
did not appear in their accounts and online portfolios.
61. Beginning in late 2014, Lleras admitted on several occasions that he
defrauded investors.
62. For example, Lleras confessed to family members that he had not purchased
properties for investors as he said he would do, had liquidated properties purchased
for investors without their knowledge, and had diverted investor funds for other
business purposes.
63. Also, on December 2, 2014, Lleras executed an agreement between
Optimum and three of the investors acknowledging his debt to all of the investors.
He confirmed that Optimum owed the investors more than $2.9 million, and
promised to provide them with a promissory note in that amount with a maturity
date of February 27, 2015, as well as a personal guarantee from him an  d his wife
with respect to the note.  Lleras also agreed to assign deeds and other interests to
the investors to secure the note.

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64. Additionally, when confronted by investors, Lleras confessed that he took
their funds to pay for other business liabilities.
 COUNT I—FRAUD
Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)(1)]
65. Paragraphs 1 through 64 are hereby re-alleged and are incorporated herein
by reference.
66. From at least March 2012 through the fall of 2014, Defendants, in the offer
and sale of the securities described herein, by the use of means and instruments of
transportation and communication in interstate commerce and by use of the mails,
directly and indirectly, employed devices, schemes and artifices to defraud
purchasers of such securities, all as more particularly described above.
67. Defendants knowingly, intentionally, and/or recklessly engaged in the
aforementioned devices, schemes and artifices to defraud.
68. While engaging in the course of conduct described above, Defendants acted
with scienter, that is, with an intent to deceive, manipulate or defraud or with a
severely reckless disregard for the truth.
69. By reason of the foregoing, Defendants, directly and indirectly, have
violated and, unless enjoined, will continue to violate Section 17(a)(1) of the
Securities Act [15 U.S.C. § 77q(a)(1)].

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COUNT II—FRAUD

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]
70. Paragraphs 1 through 64 are hereby realleged and are incorporated herein by
reference.
71. From at least March 2012 through the fall of 2014, Defendants, in the offer
and sale of the securities described herein, by use of means and instruments of
transportation and communication in interstate commerce and by use of the mails,
directly and indirectly:
 a.   obtained money and property by means of untrue statements of
material fact and omissions to state material facts necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading; and
 b.    engaged in transactions, practices and courses of business which
would and did operate as a fraud and deceit upon the purchasers of such securities,
all as more particularly described above.
72. By reason of the foregoing, Defendants, directly and indirectly, have
violated and, unless enjoined, will continue to violate Sections 17(a)(2) and
17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].

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COUNT III—FRAUD

Violations of Section 10(b) of the Exchange Act
[15 U.S.C. § 78j(b)]and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]
73. Paragraphs 1 through 64 are hereby re-alleged and are incorporated herein
by reference.
74. From at least March 2012 through the fall of 2014, Defendants, in
connection with the purchase and sale of securities described herein, by the use of
the means and instrumentalities of interstate commerce and by use of the mails,
directly and indirectly:
 a. employed devices, schemes, and artifices to defraud;
 b. made untrue statements of material facts and omitted to state material
facts necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading; and
 c.   engaged in acts, practices, and courses of business which would and
did operate as a fraud and deceit upon the purchasers of such securities,
all as more particularly described above.
75. Defendants knowingly, intentionally, and/or recklessly engaged in the
aforementioned devices, schemes and artifices to defraud, made untrue statements
of material facts and omitted to state material facts, and engaged in fraudulent acts,
practices and courses of business.  In engaging in such conduct, Defendants acted

17

with scienter, that is, with an intent to deceive, manipulate or defraud or with a
severely reckless disregard for the truth.
76. By reason of the foregoing, Defendants, directly and indirectly, have
violated and, unless enjoined, will continue to violate Section 10(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R.
§ 240.10b-5].
PRAYER FOR RELIEF
 WHEREFORE, Plaintiff Commission respectfully prays for:
I.
 Findings of fact and conclusions of law pursuant to Rule 52 of the Federal
Rules of Civil Procedure, finding that Defendants named herein committed the
violations alleged herein.
II.
 Permanent injunctions enjoining Defendants, their officers, agents, servants,
employees, and attorneys from violating, directly or indirectly, Section 17(a) of the
Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15
U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].

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III.
 An order requiring the disgorgement by Defendants of all ill-gotten gains or
unjust enrichment with prejudgment interest, to effect the remedial purposes of the
federal securities laws.
     IV.
 An order pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)]
and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)] imposing civil
penalties against Defendants.
V.
 Such other and further relief as this Court may deem just, equitable, and
appropriate in connection with the enforcement of the federal securities laws and for
the protection of investors.

 Plaintiff requests a jury trial.

Dated: February 10, 2016
Respectfully submitted,

/s/ Kristin W. Murnahan
 M. Graham Loomis
Regional Trial Counsel
Georgia Bar No. 457868

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Email: [email protected]

Tel: (404) 842-7622
 Kristin W. Murnahan
      Senior Trial Counsel
      Georgia Bar No. 759054
      Tel: (404) 842-7655
      Email: [email protected]

      COUNSEL FOR PLAINTIFF
      Securities and Exchange
      Commission
      950 East Paces Ferry Road, N.E.
      Suite 900
      Atlanta, Georgia 30326
      Tel: (404) 842-7600
      Fax: (703) 813-9525

IN THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF NORTH CAROLINA 

CHARLOTTE DIVISION 
 
 
SECURITIES AND EXCHANGE 
COMMISSION, 

: 
: 
: 

 
 

 
Plaintiff, 

: 
: 

 
 Civil Action No. 

 
v. 

: 
: 

 

 
OPTIMUM INCOME PROPERTY, LLC, 
OPTIMUM PROPERTY INVESTMENTS, 
LLC, and 
FRANK E. LLERAS,  
 
Defendants. 

: 
: 
:
: 
:
:
: 

 
 

 :  
  

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 
 
 Plaintiff, Securities and Exchange Commission (“Commission”), files its 

complaint and alleges that: 

OVERVIEW 

1. From at least March 2012 through the fall of 2014, Frank E. Lleras 

(“Lleras”) and two Charlotte, North Carolina-based companies that he controls, 

Optimum Income Property, LLC and Optimum Property Investments, LLC 

(collectively, “Optimum”), conducted an offering fraud that targeted investors in 

the Dominican Republic and raised more than $2.9 million from at least twenty-

five victims. 

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2 
 

2. Lleras solicited money from investors by representing, both orally and in a 

written agreement with investors, that he would use the funds to purchase 

residential homes and condominiums located in Charlotte.   

3. Lleras further represented to investors that he would renovate and resell, or 

rent, the properties he purchased for substantial profit and take as his fee a 

percentage of the investors’ net profit. 

4. Lleras’s investment contracts were securities and his representations to 

investors were false.   

5. Within days of receiving investor funds, Lleras misappropriated large 

portions of those funds for his own benefit.  Lleras diverted investor funds to 

support his personal lifestyle, including paying more than $1.1 million in credit 

card charges; making numerous purchases at luxury retailers; and conducting 

hundreds of smaller, personal transactions. 

6. Lleras concealed his scheme, and induced additional investments, by giving 

investors fake documents, including forged deeds and fictitious property tax 

receipts, concerning properties that he falsely told them they owned. 

7. With respect to at least three properties, Lleras provided fake deeds to 

investors falsely showing that they owned properties that Optimum itself wholly 

owned. 

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3 
 

8. Lleras also provided investors with fake quarterly account statements that 

listed the properties supposedly owned by an investor, as well as income from the 

sale or rental of the property, Optimum’s management fees, and unrealized profits. 

9. These fake documents lulled investors into a false sense of security, and 

enticed several investors to make additional investments with Lleras. 

10. Beginning in late 2014, after being confronted by a few investors who 

questioned their returns, Lleras confessed that he had defrauded investors and 

admitted to several investors that he had used funds for impermissible purposes.        

     VIOLATIONS 

11. Defendants have engaged and, unless restrained and enjoined by this Court, 

will continue to engage in acts and practices that constitute and will constitute 

violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 

U.S.C. § 77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 

(“Exchange Act”) [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 

240.10b-5]. 

JURISDICTION AND VENUE 

12. The Commission brings this action pursuant to Sections 20 and 22 of the 

Securities Act [15 U.S.C. §§ 77t and 77v] and Sections 21(d) and 21(e) of the 

Exchange Act [15 U.S.C. §§ 78u(d) and 78u(e)] to enjoin Defendants from 

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4 
 

engaging in the transactions, acts, practices, and courses of business alleged in this 

complaint, and transactions, acts, practices, and courses of business of similar purport 

and object, for civil penalties and for other equitable relief.  

13. This Court has jurisdiction over this action pursuant to Section 22 of the 

Securities Act [15 U.S.C. § 77v] and Sections 21(d), 21(e), and 27 of the Exchange 

Act [15 U.S.C. §§ 78u(d), 78u(e), and 78aa]. 

14. Defendants, directly and indirectly, made use of the mails, the means and 

instruments of transportation and communication in interstate commerce and the 

means and instrumentalities of interstate commerce in connection with the 

transactions, acts, practices, and courses of business alleged in this complaint and 

made use of mail and means of instrumentality of interstate commerce to effect 

transactions, or to induce or to attempt to induce the purchase or sale of securities 

alleged in this complaint. 

15. Certain of the transactions, acts, practices, and courses of business 

constituting violations of the Securities Act and the Exchange Act occurred in the 

Western District of North Carolina.  In addition, Lleras resides in the Western 

District of North Carolina and directed the operations of Optimum from the 

Western District of North Carolina. 

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5 
 

16. Defendants, unless restrained and enjoined by this Court, will continue to 

engage in the transactions, acts, practices, and courses of business alleged in this 

complaint, and in transactions, acts, practices, and courses of business of similar 

purport and object. 

THE DEFENDANTS 

17. Optimum Income Property, LLC (“Optimum Income”) is a Florida limited 

liability company formed by Lleras in 2013.  It currently is listed on the Florida 

Department of State Division of Corporations’ website as “Inactive.”  Lleras 

portrayed Optimum Income as a private real estate investment company that 

handled all aspects of real estate investing for investors.   

18. Optimum Property Investments, LLC (“Optimum Property”) is a North 

Carolina limited liability company formed by Lleras in 2009.  The nature of the 

Optimum Property business is described as “real estate investments” in filings with 

the North Carolina Secretary of State.   

19. Frank Lleras is the control person of Optimum and signed agreements with 

investors on its behalf.   

 

 

 

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6 
 

THE FRAUDULENT SCHEME 

20. From at least March 2012 through the fall of 2014, Lleras raised more than 

$2.9 million from at least twenty-five investors in the Dominican Republic.   

21. Lleras solicited investors to give him money by representing to them that he 

would use their funds to purchase residential homes and condominiums in 

Charlotte, many of which had fallen into foreclosure or otherwise were distressed, 

from Fannie Mae, Freddie Mac, and Bank of America.   

22. Lleras told investors that the opportunity to purchase the properties stemmed 

from his contacts with Bank of America.   

23. Lleras further told investors that, after purchasing the properties, he would 

either renovate and sell the properties for profit or rent the properties to generate 

income for investors.   

24. Lleras outlined to investors a process whereby he would form a limited 

liability company (“LLC”) in each investor’s name, and then open an account in 

the LLC’s name at Bank of America.   

25. Lleras told investors that after they wired funds into the LLC bank accounts, 

he would use the funds to purchase and title properties in the names of the LLCs.  

He explained to the investors that the LLC structure was necessary because the 

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7 
 

investors were not U.S. citizens, and that using the LLCs would minimize their tax 

burden.  The LLCs were formed by Lleras in North Carolina. 

26.  At least twenty-five investors ultimately invested more than $2.9 million in 

Lleras’s fraudulent scheme. 

27. The investors primarily consisted of physicians residing and practicing in the 

Dominican Republic, many of whom were friends or professional acquaintances 

with Lleras’s father-in-law. 

28. Each investor entered an Agency Agreement with Optimum.  These 

agreements provided that they were governed by North Carolina state law and that 

any litigation arising out of the agreements was to take place in North Carolina. 

29. Although the agreement was drafted to suggest that the client was selecting a 

specific property to purchase from a few presented by Lleras and allowed the client 

to discontinue Optimum services, in reality these powers were illusory and the 

investors were reliant on Lleras to perform all essential management functions with 

regard to the investment.   

30. The information that Lleras gave investors to choose a property was 

minimal, typically including a photograph, the purchase price, and Lleras’s 

projected return on investment.   

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8 
 

31. Moreover, the investors were foreign nationals residing outside the United 

States, most with limited English language skills and no experience in purchasing, 

renting, or reselling real estate in the United States.   

32. The investors relied wholly on Lleras and Optimum’s efforts to identify 

appropriate properties, renovate those properties, and then make a profit by 

reselling or renting the properties. 

33. Optimum was responsible for all essential functions of the investment, 

including the acquisition and maintenance of the properties. 

34. Additionally, investors relied on Lleras to decide whether and when to rent 

or sell the properties. 

35. The agreement also detailed Optimum’s compensation and provided that 

Optimum was entitled to ten percent of net profit from rent, and, upon sale of the 

property, between five and fifteen percent of the resulting net profit along with a 

three-percent sales commission. 

36. Defendants’ profits were dependent upon the return on the investments made 

by the individual investors. 

37. After the investors wired funds to their LLC accounts, Lleras provided them 

with purported property deeds and property tax payment receipts for the properties 

that they believed they owned. 

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38. Lleras also provided investors with quarterly account statements, which 

listed the properties purportedly owned by the investors, as well as income from 

the sale or rental of the properties, Optimum’s management fees, and unrealized 

profits.     

39. Contrary to Lleras’s representations, investor funds were not used to buy 

investment properties for investors, but instead were used for Lleras’s personal or 

unrelated business expenses. 

40. Lleras’s personal use of investor funds was contrary to the written and oral 

representations he made that investor funds would be used solely for purchasing, 

renovating, and maintaining real estate properties for investors.  

41. Lleras received more than $2.9 million of investor funds.  Instead of 

purchasing properties, as he represented he would do, he (i) used more than $1.1 

million to pay bills from American Express; (ii) made purchases at luxury retailers, 

such as Cartier, Louis Vuitton, and Christian Louboutin; and (iii) conducted 

hundreds of smaller transactions that clearly were personal in nature (e.g., 

purchases at Bye Bye Baby, PetSmart, Starbucks, and Victoria’s Secret).  

42. Lleras also provided fake documents to investors to cover up the scheme, 

assure them that their investments were secure, and induce them to make additional 

investments.   

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43. First, Lleras provided investors with deeds for properties that he claimed to 

have purchased in their LLCs’ names.  Lleras, however, ultimately admitted to 

several investors that he had forged the deeds. 

44. At least twelve deeds provided to investors were fabricated.  With respect to 

at least three properties, Lleras provided fake deeds to investors falsely showing 

that they owned properties that Optimum itself wholly owned. 

45. Second, Lleras provided to investors fake receipts purporting to show the 

payment of property taxes on the properties.  Because the LLCs did not own the 

properties, however, no tax payments were owed or made in their names.   

46. Finally, Lleras provided false quarterly account statements to investors.  The 

statements listed specific properties that composed the investors’ portfolios, as well 

as income from the sale or rental of the properties, Optimum’s management fees, 

and unrealized profits along with updated and projected returns. 

47. These account statements listed information concerning properties and 

resulting income and profits for properties that the investors did not own.   

48. The experiences of two investors in Lleras’s scheme are illustrative.  First, 

Investor A, a doctor in the Dominican Republic, invested approximately $290,000 

with Lleras and Optimum in order to purchase properties in Charlotte.   

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49. Investor A first met Lleras in March 2012 when Lleras traveled to the 

Dominican Republic to solicit investors and explain the Optimum investment 

opportunity.   

50. Lleras told Investor A that first he would create an LLC in the name of the 

investor and open a Bank of America account in the name of the LLC.  Lleras then 

said he would purchase bank-owned properties in the investor’s LLC name, and 

either manage the rental of the property or make repairs to the property and sell it 

at a profit. 

51. Lleras guaranteed a thirty-percent profit to the investor for the resale of 

property.  In return, Lleras would keep as his profits five percent of rental income 

and between five and fifteen percent of net profit of any resale. 

52. Based on Lleras’s representations, Investor A entered into an Agency 

Agreement with Optimum and, on July 4, 2012, wired approximately $86,000 from 

his bank in the Dominican Republic to his newly opened Bank of America account 

in the name of a LLC Lleras created on Investor A’s behalf. 

53. Investor A wired the funds to purchase two specific properties identified to 

him by Lleras.  Subsequently, Lleras provided Investor A with a deed for one of 

the properties that listed Investor A’s LLC as the owner of record.  This deed was 

fabricated.   

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54. Investor A, unaware that the deed was fabricated and comforted by this 

purported evidence of his ownership of the property, agreed to invest more money 

with Lleras to purchase additional proprieties.  In 2013 and 2014, Investor A wired 

funds on at least three occasions totaling more than $200,000, so that Lleras could 

purchase four additional properties on his behalf. 

55. Despite Lleras’s representations, Investor A never had title to at least two of 

these properties.  

56. Investor B, also a doctor in the Dominican Republic, invested approximately 

$177,000 with Lleras and Optimum for the purchase of properties in Charlotte. 

57. In approximately 2013, Investor B attended a presentation by Lleras in the 

Dominican Republic during which Lleras described the opportunity to invest in 

real estate properties in Charlotte through Optimum.   

58. Lleras told Investor B that first he would create an LLC in the name of the 

investor and open a Bank of America account in the name of the LLC.  Lleras then 

said he would purchase bank-owned properties in the investor’s LLC name, and 

either manage the rental of the property or make repairs to the property and sell it 

at a profit. 

59. Based on Lleras’s representations, Investor B invested approximately 

$177,000 with Optimum in three separate transactions.  Lleras subsequently 

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provided two deeds to Investor B that listed Investor’s B’s LLC as the lawful 

owner of the properties.  Again, the deeds were fabricated. 

60. In late 2014, several investors became concerned about their investments 

with Lleras because expected rental payments and profits from sales of properties 

did not appear in their accounts and online portfolios. 

61. Beginning in late 2014, Lleras admitted on several occasions that he 

defrauded investors.   

62. For example, Lleras confessed to family members that he had not purchased 

properties for investors as he said he would do, had liquidated properties purchased 

for investors without their knowledge, and had diverted investor funds for other 

business purposes. 

63. Also, on December 2, 2014, Lleras executed an agreement between 

Optimum and three of the investors acknowledging his debt to all of the investors.  

He confirmed that Optimum owed the investors more than $2.9 million, and 

promised to provide them with a promissory note in that amount with a maturity 

date of February 27, 2015, as well as a personal guarantee from him and his wife 

with respect to the note.  Lleras also agreed to assign deeds and other interests to 

the investors to secure the note. 

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64. Additionally, when confronted by investors, Lleras confessed that he took 

their funds to pay for other business liabilities.  

 COUNT I—FRAUD 

Violations of Section 17(a)(1) of the Securities Act 
[15 U.S.C. § 77q(a)(1)] 

65. Paragraphs 1 through 64 are hereby re-alleged and are incorporated herein 

by reference. 

66. From at least March 2012 through the fall of 2014, Defendants, in the offer 

and sale of the securities described herein, by the use of means and instruments of 

transportation and communication in interstate commerce and by use of the mails, 

directly and indirectly, employed devices, schemes and artifices to defraud 

purchasers of such securities, all as more particularly described above. 

67. Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud. 

68. While engaging in the course of conduct described above, Defendants acted 

with scienter, that is, with an intent to deceive, manipulate or defraud or with a 

severely reckless disregard for the truth. 

69. By reason of the foregoing, Defendants, directly and indirectly, have 

violated and, unless enjoined, will continue to violate Section 17(a)(1) of the 

Securities Act [15 U.S.C. § 77q(a)(1)]. 

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COUNT II—FRAUD 
 

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act 
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 

70. Paragraphs 1 through 64 are hereby realleged and are incorporated herein by 

reference. 

71. From at least March 2012 through the fall of 2014, Defendants, in the offer 

and sale of the securities described herein, by use of means and instruments of 

transportation and communication in interstate commerce and by use of the mails, 

directly and indirectly: 

 a. obtained money and property by means of untrue statements of 

material fact and omissions to state material facts necessary in order to make the 

statements made, in light of the circumstances under which they were made, not 

misleading; and 

 b.  engaged in transactions, practices and courses of business which 

would and did operate as a fraud and deceit upon the purchasers of such securities, 

all as more particularly described above. 

72. By reason of the foregoing, Defendants, directly and indirectly, have 

violated and, unless enjoined, will continue to violate Sections 17(a)(2) and 

17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 

 

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COUNT III—FRAUD 
 

Violations of Section 10(b) of the Exchange Act 
[15 U.S.C. § 78j(b)]and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] 

73. Paragraphs 1 through 64 are hereby re-alleged and are incorporated herein 

by reference. 

74. From at least March 2012 through the fall of 2014, Defendants, in 

connection with the purchase and sale of securities described herein, by the use of 

the means and instrumentalities of interstate commerce and by use of the mails, 

directly and indirectly: 

 a. employed devices, schemes, and artifices to defraud; 

 b. made untrue statements of material facts and omitted to state material 

facts necessary in order to make the statements made, in light of the circumstances 

under which they were made, not misleading; and 

 c. engaged in acts, practices, and courses of business which would and 

did operate as a fraud and deceit upon the purchasers of such securities, 

all as more particularly described above. 

75. Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud, made untrue statements 

of material facts and omitted to state material facts, and engaged in fraudulent acts, 

practices and courses of business.  In engaging in such conduct, Defendants acted 

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with scienter, that is, with an intent to deceive, manipulate or defraud or with a 

severely reckless disregard for the truth. 

76. By reason of the foregoing, Defendants, directly and indirectly, have 

violated and, unless enjoined, will continue to violate Section 10(b) of the 

Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R.               

§ 240.10b-5]. 

PRAYER FOR RELIEF 

 WHEREFORE, Plaintiff Commission respectfully prays for: 

I. 

 Findings of fact and conclusions of law pursuant to Rule 52 of the Federal 

Rules of Civil Procedure, finding that Defendants named herein committed the 

violations alleged herein. 

II. 

 Permanent injunctions enjoining Defendants, their officers, agents, servants, 

employees, and attorneys from violating, directly or indirectly, Section 17(a) of the 

Securities Act [15 U.S.C. § 77q(a)] and Section 10(b) of the Exchange Act [15 

U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

 

 

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III. 

 An order requiring the disgorgement by Defendants of all ill-gotten gains or 

unjust enrichment with prejudgment interest, to effect the remedial purposes of the 

federal securities laws. 

     IV. 

 An order pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] 

and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)] imposing civil 

penalties against Defendants.  

V. 

 Such other and further relief as this Court may deem just, equitable, and 

appropriate in connection with the enforcement of the federal securities laws and for 

the protection of investors.   

  

 Plaintiff requests a jury trial. 

 

Dated: February 10, 2016 

Respectfully submitted, 
 
/s/ Kristin W. Murnahan     

 M. Graham Loomis 
Regional Trial Counsel 
Georgia Bar No. 457868 

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Email: [email protected] 
 
Tel: (404) 842-7622 

 Kristin W. Murnahan 
      Senior Trial Counsel 
      Georgia Bar No. 759054 
      Tel: (404) 842-7655 
      Email: [email protected] 
       
      COUNSEL FOR PLAINTIFF 
      Securities and Exchange     
      Commission 
      950 East Paces Ferry Road, N.E. 
      Suite 900 
      Atlanta, Georgia 30326 
      Tel: (404) 842-7600 
      Fax: (703) 813-9525 

Case 3:16-cv-00073-GCM   Document 1   Filed 02/10/16   Page 19 of 19

mailto:[email protected]

	OVERVIEW
	THE DEFENDANTS
	Violations of Section 17(a)(1) of the Securities Act
	[15 U.S.C. § 77q(a)(1)]
	COUNT II—FRAUD

	Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
	[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]
	Violations of Section 10(b) of the Exchange Act
	[15 U.S.C. § 78j(b)]and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]