Home » South Florida businessman fleeced millions from Venezuelan-American investors, SEC suit says

South Florida businessman fleeced millions from Venezuelan-American investors, SEC suit says

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A South Florida businessman is accused of fleecing millions of dollars from more than 500 investors, many in the region’s Venezuelan-American community, to raise money for making high-interest payday loans, according to a Securities and Exchange Commission complaint filed Monday.

In a civil enforcement action, the SEC says Efrain Betancourt Jr. and his Miami company, Sky Group USA, sold investors fraudulent promissory notes totaling $66 million — money that he spent on a luxurious lifestyle while using some of the funds Ponzi-style to pay back investors to keep them at bay.

“The scheme unraveled in July 2019, when Betancourt told investors that Sky Group was suspending investor repayments on the notes,” according to the SEC complaint filed in Miami federal court. “Even then, Betancourt and Sky Group continued to lie, falsely blaming the suspension of repayments on a vendor responsible for processing the company’s investor repayments.”

Betancourt could not be immediately reached for comment Monday. No lawyer was listed for him in the court record.

According to the SEC’s complaint, Sky Group and Betancourt falsely told investors that the company would use investors’ money solely to make payday loans and cover the costs of such loans, promising them annual rates of return as high as 120 percent on the notes. In reality, the complaint says, Betancourt misappropriated at least $2.9 million for personal use, including for his extravagant wedding at a chateau on the French Riviera, vacations to Disney resorts and the Caribbean, and costs associated with the purchase of a luxury Miami condominium. He also used some of the money for service on his personal Piper airplane, SEC officials said.

Betancourt is also accused of transferring at least another $3.6 million to friends and family, including his ex-wife, Angelica Betancourt, and to EEB Capital Group LLC. That company’s bank accounts were controlled by Betancourt and his current wife.

Betancourt and Sky Group also used at least $19.2 million of investors’ money to make Ponzi-like payments to other investors, says the SEC complaint, filed by senior trial counsel Robert Levenson.

The complaint further alleges that Betancourt and Sky Group misled investors by promising extraordinary returns on their promissory notes and representing the loan business was profitable, even though Sky Group did not generate sufficient revenue to cover principal and interest payments due to investors.

“As alleged in our complaint, Sky Group and Betancourt lured unsuspecting investors, including many members of the South Florida Venezuelan-American community, with false claims and promises of high-return, low-risk investments,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “We continue to caution investors to be wary of any investment that promises returns that are too good to be true.”

The SEC’s complaint charges Sky Group and Betancourt with violations of the registration and anti-fraud provisions of the federal securities laws in addition to charging Betancourt with acting as an unregistered broker.

The complaint also names as relief defendants Angelica Betancourt and EEB Capital Group LLC in connection with their illicit receipt of investor funds. The SEC seeks permanent injunctions against and financial penalties from each of the defendants.

Credit: Source Link

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