A California woman and her firm have been charged with operating a $23 million Ponzi scheme that targeted Hispanic-Americans, the SEC said.

Clelia A. Flores and Maximum Return Investments Inc. (MRI) of El Segundo used “millions of dollars” from new investors to pay off earlier investors, while purporting to invest in risk-free, high-yield investment programs involving bank trading, oil and gold exploration and real estate, the SEC said.

“As we allege in our complaint, Flores violated the trust of her own community by falsely promising high returns and no risk,” said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office. “When she couldn’t deliver, she resorted to paying off early investors with money from unsuspecting newcomers.”

Flores and MRI promised returns of up to 25 percent within 30 to 45 days, the SEC said, adding that investors funds were misappropriated “to pay personal expenses for Flores and finance a lavish party for MRI to celebrate the company’s alleged financial success.”

The scheme attracted more than 150 investors in seven states between late 2006 and early 2008, the SEC said.

“Flores and MRI solicited investors in the Hispanic-American community through word of mouth and referrals, and promotional documents were produced in Spanish and English,” the SEC said. “Flores paid a 10 percent commission to ‘referral partners’ who solicited new investors, and she relied heavily upon testimonials by other investors in the Hispanic-American community. Throughout 2007, MRI also hosted conferences in hotels to attract new investors.”

Despite claims by Flores that investor funds were “guaranteed safe,” Flores and MRI “neither guaranteed nor insured the $23 million raised from investors, and only used $5.6 million of this amount to invest in high-risk ventures and start-up companies that had never paid MRI any returns.”

About $13 million from new investors was used to to pay principal and returns due earlier investors, the SEC said.

“Flores misappropriated more than $3.5 million of investor funds for personal expenses, including $443,000 to purchase a home, and almost $1.5 million of investor money to finance MRI’s operations and pay for the lavish party for investors,” the SEC said.

The SEC has set up a Hotline for the Flores case:  323-965-3313 for English or 323-965-3314 for Spanish.