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Corporation Commission Orders Over $6 Million in Restitution for Hispanic Christian Church Congregations Defrauded by Multimillion-Dollar Investment Scheme

The Corporation Commission ordered Verdugo Enterprises, LLC and other respondents to pay restitution and administrative penalties for defrauding Hispanic Christian congregations in a multimillion-dollar investment scheme. 

The Corporation Commission found that Verdugo Enterprise LLC, doing business as Verdugo Gift Company, Isaias M. Verdugo, Maria G. Verdugo, Mario C. Verdugo Jr., Filemon G. Caballero and others raised over $6.5 million from at least 377 investors, most of whom were Arizona residents.

The Corporation Commission found that the respondents fraudulently solicited investments primarily from Hispanic Christian churches and/or their congregations. The Commission found that the respondents claimed that Verdugo Gift Company was raising investment capital to purchase products for the purpose of fulfilling online orders. Investors were promised 10 to -20 percent interest. The Corporation Commission found that the respondents misrepresented that their investments were guaranteed and failed to disclose that a portion of their investment funds were used to pay commissions and/or used to fund the purchase and operations of other companies. Ultimately, they failed to pay most investors back.

The Corporation Commission ordered Verdugo Gift Company and Isaias M. Verdugo to pay, jointly and severally, $6,174,398 in restitution. The Commission ordered Maria G. Verdugo to pay $121,900 in restitution, Mario C. Verdugo Jr. to pay $264,660 in restitution and Filemon G. Caballero to pay $227,185 in restitution. 

The Corporation Commission ordered the respondents to pay the following in administrative penalties: Verdugo Gift Company--$150,000; Isaias Verdugo--$150,000; Mario Verdugo--$15,000; Maria Verdugo--$10,000; and Filemon Caballero--$10,000.

All documents related to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-21064A-18-0402.
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