UPDATE 1-U.S. SEC charges Miami couple in Ponzi scheme

* Says couple raised $135 million from Cuban-Americans

* Couple’s company put in involuntary bankruptcy last year (Adds comments by spokesman for the Cantenses)

WASHINGTON, March 3 (Reuters) - U.S. securities regulators charged a prominent Miami couple on Wednesday with running a $135 million Ponzi scheme that victimized elderly Cuban-Americans living in South Florida.

In a complaint filed in Miami federal court, the Securities and Exchange Commission alleged that Gaston and Teresita Cantens, founders and co-owners of real estate developer Royal West Properties Inc in Miami, had enticed investors with promises of 9 to 16 percent returns.

Instead, beginning no later than 2002, they used new investor money to repay earlier investors and the company’s operating costs, the SEC charged. All told, the couple raised $135 million from hundreds of investors, many from South Florida’s Cuban-exile community, the complaint alleged.

The couple “used their prominent standing in a close-knit Cuban-American community to ruthlessly exploit vulnerable elderly investors who trusted them with their life savings,” Eric Bustillo, director of the SEC’s Miami regional office, said in a statement.

“They portrayed themselves as a pious couple closely involved with educational and religious organizations, while in reality they were living lavishly off money from defrauded investors.”

A spokesman for the couple, Seth Gordon, denied that they had committed fraud and said it was “regrettable that the SEC would so mischaracterize the business difficulties of Gaston and Teresita Cantens and Royal West Properties.”

“Like thousands of other honorable business owners, Mr. and Mrs. Cantens were caught in the undertow of a massive collapse of the national real estate market owing to forces that were generally unforeseen by the real estate industry, the financial markets or responsible government agencies,” Gordon said in a statement.

The SEC complaint said the Cantenses targeted investors at charitable and religious gatherings, as well as social gatherings in their home.

The pair “cultivated an image of a pious couple who were very involved in the community and with whom it was a privilege to invest,” the complaint stated.

Royal West Properties, which promoted the sale of lots on Florida’s West Coast, was placed in involuntary bankruptcy last year.

The SEC complaint alleged that the Cantenses had misled investors about the safety of their investments and the source of Royal West’s funds. It said the couple sold investors promissory notes after acquiring properties and financing their sale.

The complaint, which charges the Cantenses with violations of the securities registration and antifraud provisions of federal securities laws, seeks a permanent injunction, forfeiture of allegedly ill-gotten gains and financial penalties.

The case is Securities and Exchange Commission v. Gaston E. Cantens and Teresita Cantens, U.S. District Court, Southern District of Florida, Case No. 1:10-cv-20635. (Reporting by Dan Margolies, editing by Matthew Lewis and Gerald E. McCormick)