MIAMI — Owners of a payday loan company targeted members of South Florida’s Venezuelan community in a fraudulent investment scheme that raised more than $66 million, according to the U.S. Securities and Exchange Commission.

The SEC complaint, filed Monday in U.S. District Court in Miami, said Sky Group USA and owner Efrain Betancourt, 32, sold promissory notes to at least 505 investors who were promised returns of between 24% and 120%.

Investors were told their money would be used by Sky Group to make small-dollar short-term loans to consumers with poor credit or no credit and for costs associated with the loans, the complaint states.

While the investors were told that the company’s payday loan business was profitable, in reality “the proceeds Sky Group generated from its consumer loan business were woefully insufficient to cover principal and interest payments to investors,” the complaint states.

Instead, Betancourt used money from new investors to pay promised dividends to early investors, a familiar characteristic of a Ponzi scheme, the SEC said.

The complaint alleges that he also spent at least $2.9 million in luxuries for himself, including on a chateau wedding in France and vacations to Disney World and the Caribbean. At least $3.6 million was given to friends and relatives “for no apparent business purpose.”

“Sky Group and…

Read more…