A pair of brothers ran a Ponzi scheme that defrauded dozens of senior citizens out of more than $2.7 million by promising “guaranteed monthly income” in exchange for investing in real estate, but delivered no such returns, the Securities and Exchange Commission said this week.

Instead of providing the approximately 30 “elderly and unsophisticated” investors with returns on their investments, Matthew and Daniel Rivera pocketed the investors’ money and used some it to pay back other investors, the SEC alleged.

According to the SEC, Daniel Rivera told investors to invest in Robbins Lane, a Pennsylvania real estate company that supposedly bought, redeveloped and sold properties, with the company’s investors sharing in the “profits” from those properties.

But there were no profits to be had, the SEC said, because in what could be the phoniest scam ever, Robbins Lane had no real estate portfolio, no operations, no employees and no ability to provide income to investors. Even Ponzi scheme extraordinaire Bernie Madoff kept up appearances as much as possible.

To further the scheme, Daniel Rivera also created a website that was designed to attract investors with promises of  “providing an opportunity for the senior investor to share in the profits from prudent investments in real estate" and "giving the senior investor a guaranteed monthly income."

According to the SEC, Rivera went so far as to recommend to his investors that they should liquidate their other holdings, including retirement assets, to invest in Robbins Lane.

But instead of investing in real estate, hundreds of thousands of dollars of investor funds were used to pay other investors.

According to the SEC, Rivera diverted other funds from investors to use for personal expenses, including:purchasing tickets for sporting events, paying for college tuition and sorority dues for Rivera's daughter, paying personal credit card bills, and to purchase a condominium that, at one point, was occupied by a relative of Matthew Rivera.

After the SEC's investigation began, Matthew Rivera repaid to Robbins Lane a substantial portion of the funds that he withdrew, which were, in turn, repaid to investors, the SEC said.

According to the SEC, without admitting or denying the SEC's charges, the Rivera’s consented to entry of a final judgment permanently enjoining them from violating the provisions of the federal securities laws alleged to have been violated in the SEC's complaint.

The SEC also ordered Daniel Rivera to pay disgorgement and prejudgment interest of more than $1.9 million and a $160,000 civil penalty; ordered Matthew Rivera to pay disgorgement and prejudgment interest of $20,013 and a $100,000 civil penalty; and held Daniel Rivera Inc. and Rivera & Associates jointly and severally liable with Daniel Rivera for disgorgement and prejudgment interest of $482,029 and $109,459, respectively.

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