Founder & Former CEO of Biscayne Capital Sentenced to 10 Years for $130 Million Fraud

Roberto Gustavo Cortes Ripalda, aged 58, the co-founder, co-owner, and Chief Executive Officer of the international advisory firm Biscayne Capital, has been sentenced to 10 years in prison for conspiracy to commit wire fraud. Cortes, who pleaded guilty in September 2023, has also been ordered to forfeit $3.4 million and pay $103 million in restitution to more than 110 victims.

Between 2005 and the collapse of Biscayne Capital, Cortes, along with his co-defendant Ernesto Heraclito Weisson Pazmino, orchestrated a far-reaching Ponzi scheme. Under the guise of funding South Bay, their real estate development venture, Cortes and his co-conspirators misappropriated investor funds to repay other investors and cover mounting debt. Rather than financing luxury property developments as promised, the bulk of investments were diverted to sustain the façade of a profitable enterprise.

Massive Investor Losses & Deception

“For more than five years, Roberto Cortes and his co-conspirators ran Biscayne Capital as a Ponzi scheme, lying to investors — including the defendant’s own friends and family members — and ultimately causing more than $155 million in investor losses,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division. “The sentence will hold Cortes accountable for his years of lies and deception.”

Court filings reveal a sophisticated network of deceit. Investors were provided with falsified investment documents, misleading information regarding investment risk, return, and security, and fabricated account statements to mask the true state of their funds. Biscayne Capital continued to lure investments and disguise its financial distress until its inevitable collapse, leaving global investors facing devastating losses.

Delivered for Fraud Victims

“Today’s sentence reflects the seriousness of Roberto Cortes’s criminal conduct in orchestrating a years-long scheme with his co-conspirators to prop up a failing business while defrauding Biscayne Capital investors and clients around the globe,” said U.S. Attorney John J. Durham for the Eastern District of New York. “This sentence demonstrates our Office’s commitment to holding accountable investment professionals who abuse the trust of their clients for personal profit.”

Kareem A. Carter, Executive Special Agent in Charge for IRS Criminal Investigation, emphasised the magnitude of the crime: “This was a brazen scheme of staggering proportions. Mr. Cortes and his co-conspirators prioritised their own greed, stealing $155 million from investors. Today’s sentencing sends a clear message that we remain vigilant and will vigorously pursue those who attempt to enrich themselves through fraudulent means.”

International Cooperation & Prosecution Efforts

The investigation was led by IRS-CI, with substantial assistance from the Justice Department’s Office of International Affairs. Cortes’s arrest and extradition from Spain, as well as evidence obtained from the Cayman Islands, Curaçao, Ecuador, Spain, and Switzerland, were pivotal in bringing him to justice.

The prosecution was conducted by Bank Integrity Unit Deputy Chief Randall Warden and Trial Attorney Morgan Cohen of the Criminal Division’s Money Laundering and Asset Recovery Section, alongside Assistant U.S. Attorneys Drew Rolle and Benjamin Weintraub for the Eastern District of New York. Trial Attorney Brandon Burkart of the Criminal Division’s Fraud Section also provided critical investigative support.

Read the press release here.