Four others charged in Venezuela-targeted investment plan

Four sales representatives have been indicted by the United States Securities and Exchange Commission for their alleged role in soliciting millions of dollars from investors for an unprofitable payday loan business.

The charges came just days after Miami-based Sky Group USA LLC and its owner Efrain Betancourt Jr. agreed to settle charges brought by the SEC last September that the company had raised more than $66 million. dollars by selling unregistered promissory notes to at least 505 investors who were promised returns. between 24% and 120%.

Many of the investors targeted by the operation were members of the Venezuelan American community in South Florida, according to the SEC complaint.

The new defendants in this case were Manuel Alvis of Caracas, Venezuela, and three residents of Doral: Joseph Boulos, Carlos Pingarron and Carlos Sorondo.

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The SEC complaints against the four, filed July 13 in U.S. District Court in Miami, allege that they collectively sold more than $25 million in unregistered Sky Group promissory notes to at least 346 investors:

• Alvis, 40, raised about $5.3 million from 50 investors and earned about $1.03 million in commissions.
• Boulos, 38, sold at least $3.8 million to around 30 investors and earned $1.1. million in compensation.
• Pingarron, 41, raised more than $3.9 million from around 67 investors and was paid $942,000.
• Sorondo, 38, has raised more than $12.5 million from around 199 investors and won around $2 million in compensation.

The four were among 52 sales agents hired to present the notes to investors, the SEC said. None of the four were registered with the SEC as a broker or dealer or were associated with a registered broker or dealer, the SEC said in a press release.

Investors were told that their money would be used to make short-term loans of small dollars to borrowers with little or no credit and for the costs associated with the loans.

The investors signed a “loan and promissory note agreement” which entitled them to monthly interest payments and repayment of their principal after one year.

The principal amounts of each note ranged from $10,000 to $150,000, but reached $1.1. million, the SEC said.

While the promissory notes stipulated that proceeds from investors would be used strictly to make loans and pay the costs associated with those loans, the funds were actually used for a variety of other purposes, including paying interest to new investors – a feature of a so-called Ponzi scheme, according to complaints.

Judgments filed June 29 in SEC cases against Sky Group USA, Efrain Betancourt and two others state that Betancourt, 33, agreed to pay back $4.6 million along with $127,000 in interest and a civil fine of $1.5 million – a total of $6.18 million – within 30 days.

Separately, Sky Group USA was ordered to pay $39.3 million, which will be reduced by the amount paid by Betancourt and two relief defendants – Betancourt’s ex-wife Angelica Betancourt and EEB Capital Group.

EEB Capital Group was ordered to pay $2.2 million for its role in the scheme.

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Betancourt and his current wife were signatories to two bank accounts in the name of EEB Capital Group, according to the September SEC complaint. The company, established in February 2018, received at least $1.5 million in funds from the Sky Group “for no apparent commercial purpose”, the complaint says.

Angelica Betancourt has not yet settled the case that weighed on her. The SEC complaint says Angelica Betancourt also received at least $1.2 million in funds from Sky Group investors “for no apparent legitimate business purpose.” In court filings, she denied receiving $1.2 million.

Relief defendants are usually targeted in such lawsuits if they are suspected of having obtained ill-gotten gains but are not accused of wrongdoing.

Payments made by defendants may be distributed to investors, according to a filing with the SEC in the case.

As part of the settlement, none of the defendants admitted or denied the SEC’s allegations.

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The judgments prohibit Sky Group and Efrain Betancourt from offering or selling unregistered securities or engaging in any fraudulent investment behavior.

The complaints against the four sales reps seek similar injunctions against future sales of unregistered securities, civil penalties and the “restitution” of ill-gotten gains.

Betancourt embezzled at least $2.9 million for personal use, including several hundred thousand dollars for his wedding at an exclusive French Riviera chateau, vacations at Disney resorts and the Caribbean, costs associated with the purchase of a luxury condominium in Miami and service on his personal plane, said the SEC complaint that named him, his ex-wife Angelica Bentancourt and EEB Capital Group as defendants.

Sky Group USA was headquartered in Miami, but its main business group, Sky Cash USA, was located in a strip mall at 2637 East Atlantic Blvd. in Pompano Beach, just west of the Intracoastal Waterway.

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A website created for Sky Cash USA in 2015 is still live on the internet, with a loan application page that asks for potential borrowers’ first and last names, social security numbers, driver’s license or ID number state, birth data and current account. Number.

Calls to the phone number listed on the site went to a busy signal.

Many Sky Group investors heard about the company through word of mouth in the Venezuelan community, according to the complaint. South Florida is home to the largest concentration of Venezuelans in the United States. A large number of Venezuelans live in Weston and Doral, according to US census figures.

Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071, on Twitter @ronhurtibise or by email at [email protected].