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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA - page 11 / 18

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products, the insurance benefit precipitously declines over the life of the plan. The longer the

investment is held, the lower the insurance benefit. The offering materials and the Investor

Application only reflect the overall insurance benefit and do not disclose the fact that this

amount of coverage will decline over time. The Defendants do not provide investors with a copy

of the individual insurance policies.

  • 5.

    Cornide and de la Riva’s Misappropriation and Misuse of Investor Funds

  • 38.

    Documents obtained from the Defendants show that from 1999 to the present,

Cornide and de la Riva received payments from Pension Fund and PFA Assurance totaling $15

million, or about 35 percent of the $43 million in revenue the companies recorded for the same

period. Company ledgers show Cornide and de la Riva received equal payments totaling $7.5

million each.

39.

Between 2001 and 2004, Cornide purchased three homes in Coral Gables, and one

home in the Florida Keys, valued at $3 million. De la Riva purchased two homes in Coral

Gables valued at $2 million. Documents also show that Cornide and de la Riva purchased

Pension Fund’s Coral Gables office building in the name of Shadowcreek Investments, LLC, an

entity Cornide and de la Riva own.

CLAIMS FOR RELIEF

COUNT I

Fraud In Violation Of Section 17(a)(1) Of The Securities Act

(Against all Defendants)

  • 40.

    The Commission repeats and realleges paragraphs 1 through 39 of its Complaint.

  • 41.

    The Defendants have directly and indirectly, by use of the means or instruments

of transportation or communication in interstate commerce and by use of the mails, in the offer

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