Efrain Betancourt Jr., a 36-year-old Venezuelan businessman, has been charged with operating a Ponzi scheme that defrauded over 600 investors, mostly from the Venezuelan-American community, out of $39 million.
The indictment alleges Betancourt used investor funds for personal expenses, including a luxury condo, a private plane, an extravagant wedding in France and a luxury high-rise condo on Biscayne Boulevard.
Betancourt Jr. had reached a settlement with federal regulators a couple of years ago, ordering him to pay back the sum back. However, only some investors were paid while many others continued to get stiffed, according to federal authorities cited by The Miami Herald.
Betancourt was arrested at Miami International Airport earlier this month after returning from Colombia. He now faces a seven-count indictment charging him with conspiracy and wire fraud involving Sky Group's sale of $66 million in promissory notes to more than 600 investors with promises of double- and triple-digit annual returns.
Prosecutors argue Betancourt Jr. is a flight risk, citing his Colombian citizenship, substantial international travel, and ownership of assets abroad. They allege he sought asylum in countries without extradition agreements with the United States.
Sky Group USA's scheme began in 2016 and collapsed during the COVID-19 pandemic when the company's cash flow was severely impacted by defaults on payday loans. The SEC has described the scheme as "affinity fraud," targeting individuals with shared cultural and community ties, as most of them were from Betancourt's native Venezuela.
In depositions related to civil arbitration cases, Betancourt invoked his Fifth Amendment rights but maintained that his business was legitimate. However, the SEC claims he misused funds for personal gain, including transferring $3.6 million to family members and affiliated entities.
Betancourt's defense attorney disputes the government's characterization, highlighting Betancourt's long-standing ties to Miami, including his U.S. citizenship and local residency. A federal magistrate granted Betancourt a $1.25 million bond, but that decision is on hold pending the outcome of a government appeal.
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