MiamiColombian national Efrain Betancourt, Jr., 36, was charged with masterminding a $66 million Ponzi scam through his South Florida payday loan business, Sky Group USA, LLC, after he was arrested last week upon entering the United States. According to federal prosecutors, Betancourt used promises of astronomically high returns to entice hundreds of investors—many of whom were Venezuelans—into the fraudulent scheme.
On September 12, Betancourt was charged with wire fraud and conspiracy to commit mail and wire fraud. He is charged in the indictment, which was sealed until November 18, with running a scheme that diverted over $7.5 million for personal expenses, such as a lavish wedding in France, pricey jewelry, a Miami condominium, and family vacations, while using new investor funds to pay returns to previous investors.
According to the indictment, Betancourt claimed that investor funds would be used to support Sky Group’s payday loans in exchange for returns on promissory notes that ranged from 24% to 120% yearly. He asserted that the interest generated by these loans will be used to reimburse investors. Prosecutors claim that the company actually functioned as a Ponzi scheme, using millions to fund personal indulgences and reimbursements to previous investors. It is estimated that more than 600 people were duped by the fraud.
Betancourt may spend up to 140 years behind bars if found guilty on all counts. U.S. Attorney Markenzy Lapointe highlighted the gravity of financial crimes that take advantage of trust and result in extensive financial harm in the Southern District of Florida federal court where his case is being tried.
The investigation was led by the FBI’s Miami Field Office and the Florida Office of Financial Regulation (OFR), with support from the U.S. Securities and Exchange Commission (SEC) and the FBI’s South Florida Fraud Task Force. Betancourt was the target of a parallel civil action brought by the SEC, which was settled in July 2022.
According to a statement from the FBI Miami Field Office’s Special Agent in Charge Jeffrey B. Veltri, investment fraud schemes such as this one can have disastrous outcomes for investors, many of whom entrust their trust and life savings to fraudulent businesses.
In a case that emphasizes the dangers of high-yield investment promises and the disastrous effects of Ponzi schemes on communities, Betancourt’s arrest is a noteworthy milestone.
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