Clients were cheated out of hundreds of thousands of dollars by the owner of a payday loan company based in Miami. With the money he earned through a Ponzischeme, he compensated others.
The Miami-based proprietor of the payday loan company cheated investors out of hundreds of millions, and they refunded the money to other investors through the funds it gathered through a Ponzischeme.
500 investors, the majority of those of south Miami’s American Venezuelan community, were attracted to EfrainBetancourt Jr.’s advertising pitch to offer high-interest profits on the investment they made through the PaydayNow short-term loan business SkyGroup USA, the MiamiHerald reported.
According to the news outlet, Betancourt, 33, the company was charged by the SEC in Miami in September. Betancourt is accused of breaking securities laws in a scam dubbed “affinity fraud” by prosecutors.
The SEC has a complaint, Betancourt used a part of the 66million dollars he made through promissory notes to finance lavish lifestyles which included the purchase of a Miamiwaterfront home as well as an engagement ceremony for the wife of his four-year marriage in Monaco. Betancourt is also accused of transferring funds between his wife as well as acquaintances, and making use of a minimum sum of $29 million from the Ponzi plan to provide investors interest to discourage investors from investing.
The SEC has a complaint claiming it was Betancourt and Sky Group falsely told investors that they will use the money according to the SEC lawsuit, Betancourt and Sky Group misled investors by claiming that the money would be used solely to finance paydayloans and will cover costs associated with them. On bonds, they were guaranteed annual profits of as much as 120 percent.
The chairman of the SEC’s Miami Regional Office, Eric I. Bustillo, told the Herald, “We will continue to warn investors to be cautious of investments that appear to be too good to be true,” says the report.
Monetary fines and permanent injunctions are sought by the SEC.
The program ran from 2016 January to 2020 March well before the COVID outbreak. Sky Group experienced a major cash-flow dilemma, according to the lawsuit, when a number of consumers defaulted on their paydayloans and were in a position where they can’t afford to pay their interest due to promissory notes.
Betancourt was also claiming to have computer engineering and law degrees from the US, according to court records and legal filings.
During depositions with the lawyer who represented his former clients earlier this month, Betancourt regularly asserted his right to free speech under the Fifth Amendment privilege against self-accusation, according to the Herald. The same lawyer testified in a deposition in May that he did not have a computer science or law engineering degree in the US. He claimed that the paydayloan business had been legitimate and identified the investors as “lenders” involved in financing low-interest, short-term loans that were described in the context of “business transactions.”
Betancourt told lawyer Rick Diaz, “I made it crystal obvious that they were putting their money into a paydayportfolio.”
Betancourt’s attorney MarkDavid Hunter has argued that the promissory note loans are loans and not securities like stocks or bonds, in an appeal for the dismissal of the suit. In other words, Hunter stated that Betancourt, as well as SkyGroup, didn’t break the law for failing to repay their lenders.
According to Diaz, Betancourt could be a “mini-Madoff,” referring to the late NewYork adviser of financial BernardMadoff, who ran the country’s largest Ponzi scheme.
“Over the years, I’ve dealt with, defended, and deposed Ponzischemers,” the former Ponzi schemer told the Herald. “EfrainBetancourt is the cruelest, most arrogant, and cruelest of all, as well as the most narcissistic and selfish.”
The customer from Diaz Andres Zorrilla, who was interviewed by the media and was skeptical because Betancourt never returned his calls or respond to emails he sent when the client attempted to withdraw $330,000 from investment portfolio to pay medical expenses for his mother. In one of the emails, he had included a picture of his mom with stitches that were made during brain surgery.
“All he was doing was stealing money,” Zorilla explained. Zorilla has a score of 38. Their wife’s brother, his sister, and a number of other acquaintances of Betancourt’s business. Zorrilla and his family contributed a total of 150,000USD to the company. They got a lot of attention. They did, however, lose everything they had put into it.