Miamian charged in payday loan scheme allegedly splurged on $2M downtown condo

Records show Efrain Betancourt bought a unit at Epic Residences & Hotel

Miami /
Sep.September 28, 2021 02:30 PM
Epic Residences & Hotel with parts of the SEC complaint (Epic, United States District Court)

Epic Residences & Hotel with parts of the SEC complaint (Epic, United States District Court)

A Miamian accused of running a $66 million payday loan scheme allegedly diverted investors’ funds to bankroll his lavish lifestyle, including the purchase of a $1.5 million downtown condo.

The Securities and Exchange Commission charged Efrain Betancourt Jr. with violations of the securities acts in connection to fraudulently raising money from at least 505 South Florida investors, many of whom are Venezuelan-American. The SEC filed a civil complaint against Betancourt and his payday loan company Sky Group USA on Monday.

The complaint does not specify the condo. But property records show Betancourt and his wife paid $1.5 million for unit 5101 at the 54-story Epic Residences & Hotel in May 2019. The three-bedroom, three-bathroom unit totals 2,457 square feet. Ugo Colombo’s CMC Group in 2008 developed The Epic, at 200 Biscayne Boulevard Way along the Miami River.

The attorney for Betancourt and Sky Group did not immediately respond to a request for comment.

Starting in roughly January 2016 through March 2020, Betancourt allegedly sold unsuspecting investors promissory notes that he said would be used to make payday loans, and allegedly promised them returns as high as 120 percent in a year, according to the complaint. The short-term loans were for small amounts, generally from $10,000 to $150,000, to borrowers with poor or no credit.

The investment opportunity spread largely by word of mouth in South Florida’s Venezuelan-American community. Although it is unclear whether Betancourt is Venezuelan, an SEC news release says that it is common for cons to take advantage of a common nationality to gain trust.

“Betancourt pitched the investment in Sky Group as a great opportunity for members of the Venezuelan immigrant community to generate investment income,” according to the complaint.

Roughly 20 percent of the money raised was used as Betancourt vowed. At the same time, $12 million allegedly was siphoned to keep Sky Group running, and $9.8 million allegedly was used to pay commissions to the 52 sales agents that were not registered brokers, the SEC says. Most of these commissions were not disclosed to investors.

Among the fibs Betancourt allegedly told investors was that Sky Group had a $70 million loan portfolio, as a way to showcase this as a secure opportunity. At least one investor was told he stood to get a $31 million windfall, the SEC says.

When the scheme started to unravel in 2019, Betancourt allegedly told investors their repayments were suspended because of an issue with the vendor handling financing for Sky Group. The conspiracy allegedly turned into a Ponzi scheme, according to the complaint, with at least $19.2 million of investors’ money used to pay off other investors.

Betancourt used at least $2.9 million of investors’ money to enjoy a life of luxury, the SEC charges. This included his wedding at a chateau on the French Riviera, vacations to the Caribbean and Disney Resorts, and work on his personal Piper airplane.

Some of this also allegedly was used to buy the downtown Miami condo.

The 32-year-old’s friends and family also benefited, as $3.6 million was transferred to them for no apparent legitimate purpose, the complaint says.

Betancourt is not the first South Floridian charged in a fraud that included diverting funds into the region’s luxury real estate market.

In May, Dusko Bruer was sentenced to 24 months in prison for evading taxes and stashing $6.3 million from his profitable farming equipment company in offshore accounts. Bruer splurged $1.6 million on a three-bedroom Lake Worth Beach house on the Intracoastal Waterway for his then-girlfriend.

Bruer’s attorney at the time said Bruer fell victim to a “playboy lifestyle,” but that ultimately he had legitimately earned his money, owned up to his mistakes and pleaded guilty.

In one of the most notable ties between real estate and fraud schemes, a Sunny Isles Beach Porsche Design Tower unit allegedly was used as payment to one of the money launderers charged in 2018 in a $1.2 billion scheme to embezzle from Venezuela’s state-owned oil company PDVSA.





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