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Montecito Man Faces Federal Fraud Charges for Investment Schemes

A Montecito man has been arrested on federal fraud charges and faces allegations of orchestrating two investment frauds and violating a court order that prohibited him from acting as an unlicensed broker, according to the U.S. Attorney’s Office.

Efstratios “Elias” Argyropoulos, 71, of Montecito, was indicted by a grand jury in October and arrested Wednesday, U.S. Attorney’s Office spokesman Thom Mrozek said.

Argyropoulos operated financial services businesses Prima Capital Group, Inc. and Prima Ventures – out of a 1230 Coast Village Road office, according to Yelp and other sites – but was not a licensed broker, according to authorities.

He was arraigned in U.S. District Court, pleaded not guilty, and was released on a $300,000 bond, Mrozek said, adding that trial is scheduled for March 20.

Argyropoulos’ “fraudulent schemes” included soliciting investments for securities he did not purchase, and investments for a trust that did not exist, according to indictment allegations.

From October 2010 to October 2015, Argyropoulos contacted potential investors to offer stock offerings, such as pre-IPO shares of Facebook and Twitter, and while representing himself as a licensed broker, according to the indictment.

He is accused of using investors’ money not to buy those shares, but to day-trade in unrelated stocks, and fund personal expenses such as car, mortgage, travel and gambling.

He received about $4.9 million from this scheme, according to authorities.

Argyropoulos is also accused of soliciting investments for a trust, called the Laurence Miles Trust or Laurence Miles Giant Estate Settlement, which he said was set up to fund medical expenses for a very ill heiress.

Her inheritance of more than $1 billion was tied up in probate court and involved the Federal Reserve and a gag order, Argyropoulos allegedly told people, and investments in the trust would yield huge returns, up to $1,000 for every dollar put in.

The trust, and the woman, did not exist, authorities say, and victim-investors lost about $760,000 in the scam.

He faces 13 fraud charges related to these two schemes, and eight criminal contempt charges for allegedly violating terms of an injunction from a SEC case, which prohibited him from working as an unlicensed broker.

The Securities and Exchange Commission in 2014 charged him with fraudulently raising money from investors to purchase Facebook and Twitter shares before their initial public offerings, and misappropriating the funds.

Argyropoulos and Prima Capital settled the case and defendants were given a permanent injunction not to work for an investment adviser or broker-dealer, and pay penalties of about $3 million, according to the SEC.

The SEC case involved a former employee, Khaled Eldaher of Texas, who was not named in the 21-count federal criminal indictment.

Assistant U.S. Attorney Scott Paetty is prosecuting the federal case, which is being investigated by the Federal Bureau of Investigation.

No booking photo was available per U.S. Attorney's Office policy, Mrozek said.​

Noozhawk managing editor Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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