SEC: Payday loan scheme bilks investors out of millions

MIAMI — The owner of a Miami-based payday loan company bilked hundreds of investors out of millions of dollars and repaid others with money he acquired from a Ponzi scheme, according to a newspaper report and federal regulators.

About 500 investors, many from South Florida’s Venezuelan American community, were taken in by Efrain Betancourt Jr.’s sales pitch of high-interest returns on their investments in his short-term loan operation Sky Group USA, the Miami Herald reported.

The Securities and Exchange Commission in Miami filed a lawsuit against Betancourt, 33, and his company in September, the report noted. The agency accuses Betancourt of committing securities violations in a scheme that authorities describe as “affinity fraud.”

In addition to the SEC complaint, a half-dozen other lawsuits and arbitration cases have been filed against Betancourt, according to the newspaper. He has not been criminally charged.

Betancourt spent a portion of the $66 million raised from promissory notes on a lavish lifestyle that included a Miami waterfront condo and a wedding to his fourth wife in Monaco, the SEC complaint charges. It also accuses him of transferring money to his ex-wife and friends and of using at least $19 million from a Ponzi-style scheme to make interest payments to some investors to keep them at bay.

The SEC complaint says Sky Group and Betancourt falsely told investors that the company would use investors’ money solely to make payday loans and…

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