Miami resident Claudio Osorio, named 2007 “Entrepreneur of the Year” by Ernst & Young, was arrested last week on twenty-three charges of conspiracy, fraud and money laundering, including major fraud against the United States. Osorio, 54, is accused of operating a Ponzi scheme that defrauded around 10 investors of $40 million in addition to swindling the US government out of $10 million. 64-year-old Craig Toll, Osorio’s CFO, was also indicted.
From 2007 to 2011 Osorio is alleged to have used his company Innovida Holdings, a manufacturer of advanced carbon construction panels, to solicit money from high-profile investors in order to finance his lavish lifestyle. Innovida was billed as a profitable enterprise with international contracts and included among its board members former Florida governor Jeb Bush and Gen. Wesley Clark.
Osorio told Innovida investors they would receive 6-10% interest a year and that their principal was guaranteed by an unnamed Middle Eastern sovereign wealth fund. The US Attorney asserts that returns were actually being paid with other clients’ money. Osorio is said to have spent half of the $40 million on personal expenses such as mortgage payments on a $12 million mansion, country club dues, his Maserati and a winter chalet in Colorado.
Known as a charming businessman, Osorio was a major player on Miami’s elite scene; he and his wife hosted extravagant parties for charitable causes and fundraisers for heavyweight political candidates like Barack Obama and Hillary Clinton. Along with his high-powered connections inWashington, Osorio secured investments from NBA players, prominent Miami developers and a group of clients from the United Arab Emirates. He would tell prospective clients that Innovida was worth anywhere from $50 to $250 million.
With the help of basketball star and investor Carlos Boozer, Osorio was able to set up a White House meeting in 2010. It was there he proposed Innovida as a contractor for humanitarian aid to Haiti after its devastating earthquake. Osorio scored a $10 million loan from the Overseas Private Investment Corporation (OPIC), a government agency responsible for funding various international projects. Innovida was supposed to build a Haitian panel factory and manufacture 10,000 shelters for refugees, but instead Osorio used millions in these funds to pay back previous investors their returns and principal.
The scale of the alleged fraud might merit another Entrepreneur of the Year award. A complaint filed by the SEC says that in March 2009, Osorio claimed in false financial statements that Innovida was valued at $35 million in cash $100 million in equity. In reality company accounts held less than $185,000 at that time. Osorio will be tried in the Southern District of Florida.
- Age: 54
- Company: Innovida Holdings
- Supposed Job: Entrepreneur
- Alleged Scam: Investment in carbon construction panels
- Profits: 6-10% annual return
- Ponzi Time: 2007-2011
- Evidence: Material Misrepresentations; Fraudulent Wire Transfers
- Number of Victims: 10
- Amount of Fraud: $50 million
- Location: Miami, FL
- Indictment: 23 counts of Wire Fraud, Conspiracy, Money Laundering
- Court: U.S. District Court, Southern District of Florida