SEC charges Florida payday lender and CEO with affinity fraud targeting Venezuelan-American community
Washington DC, September 27, 2021 —
The Securities and Exchange Commission today announced charges against Sky Group USA LLC, a Miami-based payday loan company, and its CEO, Efrain Betancourt, Jr., for fraudulently raising at least $66 million through the sale of promissory notes to more than 500 retailers. investors, including members of the Venezuelan-American community in South Florida.
According to the SEC complaint, filed in the United States District Court for the Southern District of Florida, Sky Group and Betancourt falsely told investors that Sky Group would use investors’ money only to make payday loans. and cover the costs of these loans, when, in reality, Betancourt misappropriated at least $2.9 million for personal purposes – including for his lavish wedding in a French Riviera chateau, a vacation in the Disney and Caribbean resorts, costs associated with buying a luxury condominium in Miami and servicing his Piper Avion account – and transferred at least an additional $3.6 million to friends and family, including his ex-wife, Angelica Betancourt, and to EEB Capital Group LLC, an entity whose bank accounts Betancourt and his current wife control. Sky Group and Betancourt also allegedly used at least $19.2 million of investor money to make Ponzi-like payments to other investors. Finally, the SEC complaint alleges that Sky Group and Betancourt misled investors by promising annual returns as high as 120% and indicating that Sky Group’s business was profitable, even though Sky Group did not generated sufficient revenue to cover principal and interest payments due to investors.
“As alleged in our complaint, Sky Group and Betancourt lured unsuspecting investors, including many members of the Venezuelan-American community in South Florida, with false claims and promises of high-yield and low-cost investments. low risk,” said Eric I. Bustillo, director. from the Miami Regional Office of the SEC. “We continue to warn investors to be wary of any investment that promises returns that are too good to be true.”
The SEC complaint accuses Sky Group and Betancourt of violations of registration and anti-fraud provisions of federal securities laws and further accuses Betancourt of acting as an unregistered broker. The complaint also names Angelica Betancourt and EEB Capital Group LLC as defendants in their wrongful receipt of funds from investors. The SEC is seeking permanent injunctions, reimbursement with prejudgment interest and civil penalties from each of the defendants; an officer and bar director against Betancourt; and restitution with prejudgment interest from relief defendants.
Many fraudsters take advantage of the trust created by having something in common, such as a common nationality. The SEC’s Office of Investor Education and Advocacy and the Division of Enforcement’s Retail Strategy Task Force have issued an Investor Alert containing advice on how investors should avoid investment decisions based solely on common ties. with someone recommending or selling the investment.
The SEC’s ongoing investigation is led by Alexander Charap, Cecilia Danger and Crystal Ivory at the Miami Regional Office and overseen by Jessica M. Weissman and Glenn S. Gordon. The SEC litigation is led by Robert K. Levenson and overseen by Andrew Schiff. The SEC appreciates the assistance of the Florida Office of Financial Regulation.