U.S. Department of Justice

United States Attorney
Northern District of Ohio

Ohio Investment Manager Sentenced to More Than Eight Years in Prison for $30.4 Million Fraud

CLEVELAND – Enrique F. Villalba was sentenced to more than eight years in prison, Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, announced today.

The Beachwood, Ohio, investment manager previously pleaded guilty to one count of wire fraud for executing a scheme that defrauded 27 investors of $30.4 million. Villalba, 47, was sentenced to 105 months in prison.

“This sentence serves as an example to the public that the Department of Justice and the Financial Fraud Enforcement Task Force will fight fraud in order to protect the integrity of financial markets,” U.S. Attorney Dettelbach said. “If you lie to investors, there will be a steep price to pay.”

Villalba, a graduate of the U.S. Military Academy at West Point and of the University of Puget Sound School of Law, represented to investors that his “Money Market Plus” investment methodology provided a conservative approach to futures market trading. According to court documents, in order to reduce the risk inherent in the futures market and to protect investors’ principal investments, Villalba represented to investors that he would put stop orders in place to protect their principal investments. Generally, stop orders were orders to sell the futures contracts if it appeared that the investors were beginning to lose too much money.

Villalba did not put the stop orders in place as he represented and, as a result, lost millions of dollars of investor money. Villalba also converted millions of dollars of investor money for his own purposes, which included funding his “Rico Latte” coffee shops in Hudson and Stow, Ohio; purchasing property in Vermillion, Ohio; and making Ponzi-type payments to some of his investors.

In order to conceal market losses and his misuse of investor funds, Villalba sent numerous interstate e-mail communications to investors advising them of their current positions and the stop orders he put in place to protect their investments.

This case is being prosecuted by Assistant U.S. Attorneys Bridget M. Brennan and Henry DeBaggis after an investigation by the Cleveland Office of the FBI.

This prosecution is part efforts underway by the President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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GENERAL INFORMATION
Financial Fraud Enforcement Task Force

 Leadership
Eric Holder, Attorney General, Chair
 
 Contact
(202) 514-2000
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What is Financial Fraud?
What is Financial Fraud?

Financial Fraud encompasses a wide range of illegal behavior - from mortgage scams to Ponzi schemes, credit card theft to tax fraud. Everyone is affected by financial fraud.