Businessman with KB Ties Pleads Guilty in $7 Million Fraud Case

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A South Florida businessman with ties to Key Biscayne has pleaded guilty to defrauding investors by promising large returns on commodities trading but instead using their money for himself, according to New York federal prosecutors.

Manhattan U.S. Attorney Geoffrey Berman said in an Aug. 8 news release that 53-year-old Fabio Bretas De Freitas pleaded guilty to one count of conspiracy to commit wire fraud and commodities fraud. The charge carries a maximum 25-year prison sentence.

A sentencing hearing is set for Dec. 17 before U.S. District Judge Laura T. Swain in New York federal court.

Prosecutors say Bretas operated several companies in the Miami area that solicited about $7.5 million from investors that was supposedly going to investments in a variety of commodities.

Instead, the money mainly went to Bretas himself including transfers of cash abroad.

Berman says Bretas also created a series of false financial statements and even concocted a fake email account impersonating one of the investor victims to communicate with the National Futures Association, which regulates the U.S. derivatives industry along with government agencies.

“Fabio Bretas De Freitas solicited investor funds from several companies he operated by touting his prolific ability to profit from his futures market trading strategies,” Berman said in a statement. “In reality, Bretas’ core strategy was swindling investors, using the funds to line his own pockets while doing minimal trading for his investors.”

In Key Biscayne, Bretas was known as an elder at Crossbridge Church. The pastor there, Felipe Assis, did not return a phone call seeking comment.

Court documents show that under his plea deal, Bretas will forfeit to the U.S. government nearly $5.4 million that is traceable to the fraud crimes.

The companies Bretas ran included Phynance Capital Management LLC (“Phy Cap”), Phy Global Partners Fund LLC (“PGP”), Absolute Experience LLC (“Absolute”), and Global Partners Investors LLC (“GPI”). In marketing literature, he claimed to have “statistical analysis and mathematical modeling of historical data to develop quantitative systematic methodologies applied to managed futures strategies.”

That was all false, prosecutors say.