MIAMI – A 36-year-old Colombian citizen has been charged in South Florida federal court with leading a $66 million Ponzi scheme disguised as a payday loan company to pay for his lavish lifestyle, including a Miami condo and wedding in France.
Efrain Betancourt Jr., was arrested on Nov. 14, upon entering the United States, the U.S. Department of Justice said in a news release Thursday.
The indictment, which was unsealed in federal court in Miami on Monday, charges with him with conspiracy to commit mail and wire fraud, and wire fraud on Sept. 12.
If convicted of all charges in the indictment, Betancourt, Jr. faces a maximum total penalty of 140 years’ imprisonment.
According to allegations in the indictment, Betancourt Jr. offered promissory notes to Sky Group investors with yearly returns ranging from 24% to 120%. More than 600 investors invested in Sky Group, many of whom were Venezuelan, DOJ said.
Betancourt, Jr. and others told promissory note investors their funds would be used to disburse payday loans to Sky Group clients, according to prosecutors. Interest from payday loans clients would then be used to repay promissory note investors. However, millions of dollars from promissory note investors were used to pay previous promissory note investors in Ponzi scheme.
Also, Betancourt Jr. is alleged to have used more than $7.5 million of investor funds for personal use, including a luxury chateau wedding in France, expensive jewelry, a Miami condominium and family vacations.
The U.S. Securities and Exchange Commission had a parallel proceeding against Betancourt Jr. related to the same investment fraud scheme alleged in the indictment. The SEC’s case was resolved in July 2022 in which he was ordered to pay more than $39 million to hundreds of Venezuelan Americans in South Florida.
The FBI, FBI’s South Florida Fraud Task Force and Florida Office of Financial Regulation investigated this matter.