3 days ago
Miami man who swindled millions from Venezuelan-American investors sentenced to 7 years
Dozens of Venezuelan-Americans who were swindled by a local businessman after investing tens of millions of dollars in his payday loan company poured into Miami federal court on Thursday.
One of them, David Villanueva, said he entrusted his life savings to Efrain Bentcourt Jr., the head of Sky Group USA, which used investors' funds to finance high-interest loans.
'We went to therapy,' Villanueva told U.S. District Judge Darrin Gayles, explaining that he lost 'the majority' of his $1.3 million investment in Sky Group. 'My whole family was affected by this. We considered going back to Venezuela because we found ourselves without any money.'
Gayles punished Betancourt with a seven-year prison sentence — nine months more than a federal prosecutor recommended, following the former Sky Group CEO's guilty plea to a wire fraud conspiracy in an agreement struck in May.
As part of that deal, Betancourt, a dual U.S. and Colombian citizen who was born in Venezuela and grew up in South Florida, must pay $8.3 million in a forfeiture judgment for the money that he pocketed from investors and used for personal expenses, including buying a Biscayne Boulevard luxury condo and financing his wedding at a chateau in the French Riviera..
Betancourt, 36, also will likely be ordered by the judge to pay back at least $23 million to hundreds of victims for their losses.
In total, Betancourt attracted about 600 Venezuelans in South Florida to invest $66 million over five years into his business, which used the funds from new investors to pay off old ones before his scheme collapsed during the COVID-19 pandemic in 2020.
Assistant U.S. Attorney Roger Cruz called Betancourt a 'recidivist fraudster' who lied to investors, while defense attorney Sam Rabin argued that his client started his payday loan business with 'good intentions' before it turned into an investment scheme.
'To say that he's a serial fraudster is, frankly, unfair,' said Rabin, who urged the judge to give Betancourt a sentence of less than six years, to no avail. He suggested that about 40 investment victims coordinated a 'letter-writing campaign' to the court that seemed suspicious because of their similiar content — an accusation that Cruz strongly denied.
Betancourt, who has not repaid any of his victims, appeared remorseful as he stood up in court to address the judge, saying he was ashamed of himself for hurting so many people. He pledged to pay them back.
'You deserve an apology,' said Betancourt, who drew support from his parents, a pastor and dozens of friends who attended his sentencing. 'I can only say that I didn't wake up in the morning and decide to break the law.'
According to court records, Betancourt's company made about $12.2 million in consumer loans — far less than the $66 million Sky Group attracted from investors. Betancourt and other employees spent the rest of the investors' money on operating costs, sales agent commissions and personal expenses, according to a factual statement filed with his plea agreement.
Betancourt has been in federal custody since his arrest last November by FBI agents at Miami International Airport, after Cruz argued he was a flight risk to Latin America or the United Arab Emirates.
Three years ago, Betancourt and his company reached a settlement with the Securities and Exchange Commission in a parallel civil case. SEC lawyers accused him of using his payday loan business to fleece investors, and a federal judge ordered him and his company to pay back more than $39 million.
But since the SEC settlement agreement, Bentacourt's investors have received nothing for their losses, according to authorities.
Both the SEC and federal prosecutors accused Betancourt of operating a 'Ponzi scheme' that began in 2016 by selling promissory notes to investors with promises of double- and triple-digit annual returns. Some investors were paid back in part, but most were not, leaving a huge debt after Sky Group imploded during the COVID-19 pandemic in 2020.
Betancourt's scheme collapsed when countless borrowers defaulted on their payday loans during the pandemic. His company, Sky Group, incurred a severe cash-flow problem and was unable to make interest payments on investors' promissory notes.
A Miami lawyer representing three investors who won civil arbitration cases against Betancourt said he brought the investment scheme to the SEC's attention years ago.
'These were people who had given all or part of their life savings to Mr. Betancourt,' attorney Richard Diaz told Judge Gayles during Thursday's sentencing hearing.
After Betancourt lost at arbitration, he refused to apologize to the victims.
'I took a professional offense to that,' Diaz told Betancourt's defense attorney, Rabin, during the sentencing hearing.
According to the SEC and federal court records, Betancourt misappropriated investors' money for his personal use, including buying a $1.5 million condominium at Epic Residences on Biscayne Boulevard and servicing his personal Piper airplane.
Betancourt was also accused of transferring at least another $3.6 million to friends and family, including his ex-wife, Angelica Betancourt, and to another company, EEB Capital Group LLC, for 'no apparent legitimate business purpose,' SEC officials said.
That company's bank accounts were controlled by Efrain Betancourt and his current wife, Leidy Badillo.
In a SEC settlement in 2022, EEB Capital agreed to pay $2.2 million toward the judgment against Sky Group and Efrain Betancourt.
Angelica Betancourt argued that she only earned an annual salary of $60,000 from the payday loan company, according to court records. But in 2022, she also agreed to pay about $1.1 million toward the judgment against Sky Group and her ex-husband.
