BULLETIN: Another Major Scam Rocks Florida: Claudio Eleazar Osorio Arrested By Feds, Sued By SEC; Miami Entrepreneur And Friend To Politicians Accused Of Stealing Millions From Investors

BULLETIN: Florida has served up another doozy — one that is an embarrassment to major figures in both major U.S. political parties.

Claudio Eleazar Osorio, also known as Claudio Osorio Rodriguez, 54, was arrested by federal agents today, amid charges he scammed the U.S. government out of $10 million in the aftermath of the devastating earthquake in Haiti in January 2010.

If promising to provide post-earthquake housing in Haiti and not delivering were not enough, Osorio also concocted a ruse by which investors came to believe their money was guaranteed by “a Middle Eastern sovereign wealth fund,” according to court filings today.

“This claim was patently false,” the SEC charged. “The Middle Eastern sovereign wealth fund investment was a ruse to solicit additional funds from investors.”

The Aventura resident was charged with conspiracy to commit wire fraud, wire fraud, major fraud against the United States, conspiracy to commit money laundering and making false statements to a U.S. government agency.

Also charged criminally was accountant Craig Stanley Toll, 64, of Pembroke Pines.

In a parallel civil action, Osorio and Toll were sued by the SEC, which alleged a massive fraud at Osorio’s InnoVida Holdings LLC.

Osorio, the SEC said, raised at least $16.8 million from investors and “stole nearly half” of it to “pay the mortgage on his multi-million dollar mansion and other lavish highlife expenses.”

“From his lap of luxury, Osorio concocted a compelling story about InnoVida by recruiting an impressive board of directors and boasting a bogus financial condition to lure investors into funding his scheme of lies,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.

Former Florida Gov. Jeb Bush, a Republican and the son of former President George H.W. Bush and the brother of former President George W. Bush, once sat on InnoVida’s board. So did Ret. Gen. Wesley Clark, a onetime Democratic candidate for President. Osorio also is listed in a Federal Election Commission database as an individual contributor to the Presidential campaigns of Barack Obama and Hillary Clinton, and the Congressional campaign of Debbie Wasserman Schultz, among others.

From a statement by the office of U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida (italics added):

The indictment further alleges that between January 2010 and March 2011, Osorio, Toll and others applied for and obtained a $10,000,000 loan from the Overseas Private Investment Corporation (“OPIC”), a U.S. government agency that promotes U.S. government investments abroad to foster the development and growth of free markets. The purported purpose of the loan was to build a manufacturing facility and 500 homes in Haiti (“the Haiti project”) for displaced families in the aftermath of the January 2010 earthquake. The indictment alleges that Osorio, Toll and others made materially false representations and omissions concerning, among other things, the profitability of Innovida, the purported use of the loan proceeds, an equity contribution to be made by Innovida, and contracts that Innovida purportedly had obtained with third-party vendors. Osorio used the OPIC loan proceeds to repay investors and for his and his co-conspirators’ personal benefit and to further the fraud scheme.

The SEC, meanwhile, described Osorio as a “former Ernst & Young Entrepreneur of the Year award winner.”

From a statement by the SEC (italics added):

To induce funds from investors, Osorio and Toll allegedly produced false pro forma financial statements. A pro forma financial statement for March 31, 2009, stated that InnoVida had more than $35 million in cash and cash equivalents and more than $100 million of equity. A pro forma financial statement for Dec. 31, 2009, listed more than $39 million in cash and cash equivalents and $122 million of equity. In reality, the company’s bank accounts held less than $185,000 on March 31, 2009, and less than $2 million on Dec. 31, 2009. Toll failed to review all of InnoVida’s bank account statements when he drafted financial statements. Instead, he accepted Osorio’s misrepresentations that InnoVida had these assets in an account to which Toll did not have access.

The SEC alleges that Osorio offered bogus share prices to prospective investors based on false valuations. He told one investor that InnoVida was valued at $250 million, and then a week later told a different investor that the company was worth $50 million. The latter investor purchased $100,000 of Osorio’s stake in the company for five cents per share.

Read a March 2011 story in the Sun Sentinel.

Read the SEC complaint.

Read the indictment.