SEC accuses payday lender, Florida CEO of 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 investor retailers, including members of the Venezuelan-American community in South Florida.
According to the SEC complaint, filed with the United States District Court for the Southern District of Florida, Sky Group and Betancourt falsely told investors that Sky Group would use investor money only to make payday loans. and cover the costs of those loans, when in reality Betancourt embezzled at least $ 2.9 million for personal use – including for her lavish wedding in a chateau on the French Riviera, her vacation at the resorts Disney and the Caribbean, the costs associated with buying a luxury Miami condominium and servicing its Piper plane – 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 over which Betancourt bank accounts and his current wife control. Sky Group and Betancourt have also reportedly 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 them annual returns of up to 120% and by representing that Sky Group’s business was profitable, even though Sky Group did not generated sufficient income to cover principal and interest payments owed to investors.
“As alleged in our complaint, Sky Group and Betancourt have attracted unsuspecting investors, including many members of the Venezuelan community in South Florida, with false claims and promises of high return, low risk investments.” said Eric I. Bustillo, director of the SEC’s Miami regional office. “We continue to caution 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 the registration and anti-fraud provisions of federal securities laws and further accuses Betancourt of acting as an unregistered broker. The lawsuit also names as defendants for damages Angelica Betancourt and EEB Capital Group LLC in connection with their illicit receipt of funds from investors. The SEC seeks permanent injunctions, restitution with pre-judgment interest and civil penalties from each of the defendants; an officer and director of the bar against Betancourt; and restitution with pre-judgment interest from the defendants in reorganization.
Many scammers take advantage of the confidence that comes from 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 Working Group have released a Investor alert with advice on how investors should avoid investment decisions based solely on a common connection with someone who recommends or sells 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. SEC Litigation is headed by Robert K. Levenson and overseen by Andrew Schiff. The SEC appreciates the assistance of the Florida Office of Financial Regulation.