MIAMI – Federal investigators reported an alleged Miami Ponzi schemer lived large at the expense of mostly Venezuelan-American investors, records show.
Efrain Betancourt, Jr., lived in a $1.5 million unit on the 51st floor of the Epic Residences & Hotel, with a view of the Miami River, Biscayne Bay, and the ocean. He owned a Piper aircraft. His wedding was in a luxury chateau in the French Riviera. He gifted expensive jewelry and spent generously on family vacations to Walt Disney and the Caribbean.
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Betancourt formed Sky Group USA, a payday loan company registered in Florida in 2015. According to investigators, he started to solicit investors in 2016. It didn’t take long for The U.S. Securities and Exchange Commission to take notice after he suspended repayments in 2019 and continued to solicit investors in 2020.
“He met with prospective investors in person, communicated with them by email, and spoke with them on the telephone, to explain the merits of investing ... he signed all promissory notes that investors signed ... and reviewed and approved those promissory notes. He also authorized Sky Group to pay transaction-based compensation in the form of commissions to brokers who solicited investors,” Vanessa Countryman, then SEC secretary, wrote in a July 1, 2022 order.
Betancourt allegedly used $19.2 million in investments to pay other investors. During the SEC proceeding against Betancourt, investigators alleged Sky Group did not make more than $12 million in payday loans and paid $9.8 million in commissions to dozens of sales agents. He was never registered as a broker or dealer or associated with a registered broker or dealer and had never held any securities licenses.
The SEC case was resolved in 2022, but the federal investigation continued. Federal prosecutors later accused the Miami Ponzi schemer of using Sky Group USA to raise $66 million from investors and using more than $7.5 million for personal expenses.
According to a Sept. 12 indictment unsealed on Monday in federal court, the con artist ran a fraudulent investment scheme that paid old investors with money from new investors while pretending that these were legitimate profits of Sky Group USA.
Investigators found that Betancourt offered hundreds of investors promissory notes with annual returns from 24% to 120% alleging their funds were used to disburse payday loans to Sky Group USA clients and the profits were from the Interest paid, records show.
Federal agents arrested Betancourt on Nov. 14, upon entering the U.S., on conspiracy to commit mail and wire fraud. If convicted, Betancourt faces a maximum penalty of 140 years in prison. The SEC and FBI Miami offices and investigators with the Florida Office of Financial Regulation worked on the case. Assistant U.S. Attorney Roger Cruz is prosecuting the case.