Claudio Osorio of Miami, FL, admitted responsibility in US District Court last week to running a large-scale investment scam. Under his plea agreement with federal prosecutors, Osorio pleaded guilty to two charges of wire fraud conspiracy and another charge of money laundering conspiracy. The 54-year-old Osorio, honored as Entrepreneur of the Year in 2007 by Ernst & Young, was known for his jet-set lifestyle and connections with celebrities and politicians.
The Entrepreneur of the Year’s scheme revolved around his firm Innovida Holdings, a manufacturer of hi-tech carbon construction panels. To bolster the company’s credibility, Osorio enlisted former Florida governor Jeb Bush and Gen. Wesley Clark onto its board of directors. From 2007 to 2011 he then used Innovida to defraud several wealthy investors and the US government out of a total of $50 million.
Osorio pitched his carbon panels as a perfect fit for low-cost housing projects overseas and told potential clients Innovida would generate 6-10% returns on principal. Their money would be safe, he claimed, since it was supposedly backed by a Middle Eastern sovereign wealth fund. Besides, Osorio would tell investors, Innovida was an American success story, worth upwards of $250 million. Yet the magnanimous Gulf Arabs backing the company turned out to be a mirage, and in 2009 Innovida held less than $185,000 in its accounts.
Rather than generating cash with his carbon panels, Osorio was paying out false returns from one investor to another. In 2010 he even managed to persuade the White House to facilitate a $10 million contract to Innovida through the Overseas Private Investment Corporation (OPIC), a US government agency that funds various international projects. The money was meant for Haiti disaster relief after the island’s massive earthquake, but Osorio used it to pay previous clients demanding their principal back.
Osorio was certainly a smooth operator, leveraging his “star power” to create the image of a businessman with the magic touch. By living it up with professional athletes and putting on charity events and fundraisers for politicians like Barack Obama and Hillary Clinton, he was able to maintain the illusion of Innovida as a successful investment and encourage wealthy Miami developers to buy into his Ponzi scheme. Osorio also indulged himself with client funds, spending half of their $40 million on luxuries like his Star Island mansion, a Maserati and membership at a posh country club, not to mention ski chalets in Colorado and Switzerland. It’s also thought he might have squirreled a significant amount into unknown Cayman Islands accounts.
Meanwhile Innovida CFO Craig Toll, 64, has pleaded not guilty to the charges in his indictment, claiming he had no awareness of Osorio’s fraud. Osorio, expected to receive less than the maximum 30 years for his offenses, is scheduled for a sentencing hearing on May 9th.
- Age: 54
- Company: Innovida Holdings
- Supposed Job: Entrepreneur
- 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