Miamiian accused of running $ 66million payday loan program allegedly embezzled investor funds to finance lavish lifestyle, including purchase of $ 1.5million downtown condo of dollars.
The Securities and Exchange Commission has charged Efrain Betancourt Jr. with violations of securities laws in connection with the fraudulent fundraising from at least 505 investors in South Florida, many of whom are Venezuelan-Americans. The SEC on Monday filed a civil lawsuit against Betancourt and its payday loan company Sky Group USA.
The complaint does not specify the condo. But real estate records show Betancourt and his wife paid $ 1.5 million for unit 5101 at the 54-story Epic Residences & Hotel in May 2019. The three-bedroom, three-bathroom unit totals 2 457 square feet. Ugo Colombo’s CMC group in 2008 developed The Epic, at 200 Biscayne Boulevard Way, along the Miami River.
The lawyer for Betancourt and Sky Group did not immediately respond to a request for comment.
Between January 2016 and around March 2020, Betancourt allegedly sold promissory notes to unsuspecting investors who he said would be used to make payday loans, and promised them returns of up to 120% in one year, according to the report. complaint. Short-term loans were for small amounts, typically $ 10,000 to $ 150,000, to borrowers with little or no credit.
The investment opportunity has spread widely by word of mouth throughout the Venezuelan-American community in South Florida. While it’s not clear whether Betancourt is Venezuelan, an SEC press release says it’s common for cons to take advantage of a common nationality to gain trust.
âBetancourt presented the investment in Sky Group as an excellent opportunity for members of the Venezuelan immigrant community to generate investment income,â according to the complaint.
About 20% of the money raised was used as Betancourt promised. At the same time, $ 12 million was said to have been misappropriated to keep Sky Group in business, and $ 9.8 million was used to pay commissions to 52 sales agents who were not registered brokers, according to the SEC. . Most of these commissions were not disclosed to investors.
Among the lies Betancourt allegedly told investors was that Sky Group had a $ 70 million loan portfolio, in order to present this as a safe opportunity. At least one investor has been told they are ready for a $ 31 million windfall, according to the SEC.
When the program began to unravel in 2019, Betancourt reportedly told investors that their repayments had been suspended due to an issue with the provider that manages the Sky Group funding. The plot would have turned into a Ponzi scheme, according to the complaint, with at least $ 19.2 million of investor money used to pay off other investors.
Betancourt used at least $ 2.9 million of investor money to enjoy a life of luxury, according to the SEC. This included her wedding in a castle on the French Riviera, vacations in the Caribbean and at Disney hotels, and working on her personal Piper plane.
A portion of that money was also said to have been used to purchase the downtown Miami condo.
Friends and family of the 32-year-old also benefited, as $ 3.6 million was transferred to them without any apparent legitimate purpose, according to the complaint.
Betancourt is not the first South Florida to be accused of fraud involving the embezzlement of funds into the region’s luxury real estate market.
In May, Dusko Bruer was sentenced to 24 months in prison for tax evasion and hiding $ 6.3 million from his profitable farm equipment company in offshore accounts. Bruer spent $ 1.6 million on a three-bedroom house in Lake Worth Beach on the Intracoastal Waterway for his then-girlfriend.
Bruer’s attorney at the time said Bruer fell victim to a “playboy lifestyle,” but in the end he legitimately earned his money, admitted his mistakes and pleaded guilty.
In one of the most notable links between real estate and fraud schemes, a unit of the Porsche Design Tower in Sunny Isles Beach was allegedly used as payment to one of the money launderers indicted in 2018 in connection with a $ 1.2 billion ploy to hijack Venezuela’s state oil company. PDVSA.