Royal West Properties Ex-President Sentenced to 5 Years Imprisonment
U.S. District Judge Kathleen Williams of the Southern District of Florida sentenced Gaston E. Cantens to five years’ imprisonment followed by three years of supervised release for conspiring to commit mail and wire fraud involving a $135 million securities offering fraud and Ponzi scheme targeting Cuban-American investors primarily from South Florida.
Cantens, who is now 73, served as president of Royal West Properties, Inc., a Miami-based real estate developer that purchased and resold thousands of parcels of real estate on the west coast of Florida.
Cantens funded Royal West by offering investors no-risk promissory notes that promised investors annual returns of 9% to 16% purportedly backed by recorded mortgage assignments. On January 25, 2012, Cantens pled guilty to a criminal Information filed by the United States Attorney for the Southern District of Florida.
According to the Information, beginning in 2008, Cantens made numerous material misrepresentations to investors about the financial health of Royal West when Cantens knew that Royal West, among other things, paid existing investors with new investors’ funds, assigned the same collateral to multiple investors, assigned investors to non-performing or non-existing mortgages, and failed properly to record mortgages and other interests in the public records, causing investors to have unsecured legal interests in the mortgages and parcels.
On March 3, 2010 the SEC filed an injunctive action that named Cantens and his wife, Teresita Cantens, as defendants.
On March 24, 2011, both Cantens and Teresita Cantens each consented to entry of a Final Judgment of Permanent Injunction and Other Relief in the SEC action.
In addition to being enjoined from further violations of the federal securities laws, Cantens and his wife were ordered to pay full injunctive relief and disgorgement of $5,276,750, along with prejudgment interest of $88,297.62. The Order forgoes seeking payment of civil penalties.