At the federal courthouse in Brooklyn, Frantz Simeon was sentenced by US District Judge Brian M. Cogan to 24 months in prison for his operation of a fraudulent scheme that used his company, First Black Enterprises, Inc., to target members of the Haitian American community in Brooklyn and Queens. As part of the sentence, Simeon was ordered to pay over $200,000 in restitution. The defendant pleaded guilty to mail fraud in February 2023.
Breon Peace, US Attorney for the Eastern District of New York, and Daniel B. Brubaker, Inspector-in-Charge, United States Postal Inspection Service (USPIS), announced the sentence.
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“Today, Frantz Simeon learned the consequences for exploiting his position of trust in the Haitian American community,” stated United States Attorney Peace. “Simeon lured his victims with false promises of substantial returns on investments so that he could fleece them for his own benefit, until his scheme collapsed. This Office will aggressively prosecute perpetrators of affinity fraud schemes, and this case alerts investors to be wary of community members touting investments that sound too good to be true.”
“Postal Inspectors are dedicated to investigating schemes designed to defraud innocent victims while taking advantage of the U.S. Mail. USPIS vows to continuously protect and educate the public on how to avoid these types of schemes,” stated USPIS Inspector-in-Charge Brubaker. “Simeon targeted individuals from his own community for his personal financial gain. If something sounds too good to be true, it probably is!”
Between February 2019 and December 2020, Simeon orchestrated a fraudulent scheme in which he falsely advertised his business experience and acumen, enticing investors to invest with him based on promises that their investments were risk-free and would generate 10% monthly returns. Simeon specifically preyed on Haitian Americans residing in Brooklyn and Queens, leveraging his relationships in the community to induce over $350,000 in investments with his false assurances. Contrary to his promises, Simeon conducted little or no actual business or investment activities, instead using the money from new investors to mail monthly interest payments to them and earlier investors in a Ponzi-like scheme. These purported interest payments were designed to conceal the fraud and to induce further investments, which Simeon needed to continue the scheme. In addition, Simeon misappropriated thousands of dollars of investor funds for his own personal benefit, including the purchase of a car for his daughter and making over $60,000 in cash withdrawals. Simeon’s victims, who were largely immigrants, ultimately sustained over $200,000 in losses as a result of the scheme.
The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorney Dylan A. Stern is in charge of the prosecution.
