Three men ordered to pay $129M in fraud that began in Lee County

A fraud case that originated in Lee County and now includes civil fines, jail time for one perpetrator and a pair of alleged Brazilian fugitives will cost three men nearly $130 million, after a ruling this week in the U.S. District Court for the Southern District of Florida.

The latest in the saga: The court ordered the three principal men in the case, in what's being called a commodity pool scheme, to pay more than $129 million for their roles in the fraud. A commodity pool is an investment vehicle that pools together money from multiple investors to trade commodity futures or options collectively, according to the federal Commodity Futures Trading Commission, which regulates them. A commodity pool is overseen by an operator who is supposed to register with the CFTC.

In this case, the commodity pool was operated by a company that used to be based out of Fort Myers called Empires Consulting Corp, state records show. The CFTC says the company never registered as a commodity pool operator, one of several red flags that caused the agency to file a complaint against it in the southern district court in 2022.

Brazilian nationals Emerson Pires and Flavio Goncalves, who lived in Port St. Lucie, were the leaders of Empires Consulting Corp., which had an address listed on Casa Linda Court in Fort Myers before the company dissolved in 2022, state records show. 

In September 2020, Pires and Goncalves used Empires Consulting Corp. to launch purported cryptocurrency platform EmpiresX, with Joshua Nichols of Stuart as the head trader, according to the CFTC.

The trio lured investors to trade commodity futures, options and other products through commodity interest pools under the name EmpiresX by promising 1% investment returns daily and use of a proprietary trading bot that did not exist, according to court records.

Instead of using funds as directed by investors, court documents say Pires, Goncalves and Nichols misappropriated large sums of money for personal uses like luxury cars, real estate and travel. By November 2021, the CFTC says they stopped honoring investors’ requests to withdraw funds. By June 2022, officials reported that Pires, Goncalves and Nichols had pooled at least $41.6 million from more than 12,500 individuals. Of the money collected, only $1 million was sent to a futures trading account in the name of Empires Consulting, according to the CFTC. 

The U.S. District Court for the Southern District of Florida, in a Feb. 4 ruling, found that Pires, Goncalves and Nichols knowingly made false claims about the use of pool participant funds; did not register Empires Consulting Corp. as a commodity operator; and committed fraud in connection with EmpiresX, according to a statement from the CFTC. Pires and Goncalves also commingled pool funds, violating the Commodity Exchange Act, the statement says.

Pires and Goncalves were ordered to pay more than $96 million in civil monetary penalties and over $32 million in disgorgement, while Nichols was ordered to pay $867,000 in civil fines and $289,000 in disgorgement, the CFTC says. As part of the court's ruling, Pires, Goncalves and Nichols are permanently banned from registering with the CFTC and trading in any CFTC-regulated markets.

The order from the U.S. District Court for the Southern District of Florida was the latest handed down in the case, which has resulted in parallel civil and criminal enforcement actions, including jail time, in the past few years. 

In 2024, the U.S. District Court for the Southern District of Florida ordered Empires Consulting Corp. to pay $64,356,794 in fines, according to the CFTC. 

In 2022, court records show Nichols pleaded guilty to conspiracy to commit securities fraud; he was sentenced to 51 months in prison and ordered to pay nearly $3.4 million in restitution.

The Brazilian nationals moved back to Brazil “in an effort to escape liability” once they learned of an investigation by the Securities and Exchange Commission, according to court records. The SEC said in a 2023 statement that Pires and Goncalves are considered fugitives.