Miami Businessman Claudio Osorio Arrested for Allegedly Swindling Millions From Investors


By Suzanne Yeo

A Miami businessman whom Ernst & Young once named "Entrepreneur of the Year" has been accused of swindling $40 million from investors, including some NBA stars, to support a lavish lifestyle.

Venezuelan-born Claudio Osorio, 54, was arrested Friday and charged with 23 counts of fraud and money laundering for exaggerating the success of his company, InnoVida, between March 2007 and March 2011, according to a Securities and Exchange Commission's complaint.

Craig Toll, 64, InnoVida's chief financial officer, was also charged along with his former boss.

Toll's attorney Richard Klugh released a statement to ABC News saying his client was "an honorable employee of the company and should not have been charged with anything."

Neither Osorio nor his attorney has responded to requests for comment. It's unclear whether the two men are still in custody.

Osorio allegedly took the money from about 10 investors, telling them that InnoVida produced building panels used to construct houses and other structures resistant to fires and hurricanes. Authorities say the high-flying businessman lured potential investors with false financial statements and high-profile connections, including a blue-chip board of directors that included former Florida Gov. Jeb Bush, who has not responded to a request for comment.

Osorio used the money to finance a lifestyle that included a $12 million mansion on Miami Beach's exclusive Star Island, which boasts nine bedrooms and a swimming pool with a gazebo. Osorio also illegally used investor money to buy a Maserati, a Colorado mountain retreat home and country club dues, according to the SEC complaint.

"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," Eric Bustillo, director of the SEC's Miami Regional Office, said in a news release.

Osorio allegedly even duped the likes of current and former basketball stars Dwight Howard, Alonzo Mourning and Carlos Boozer.

"Individuals who are looking for investors very often will have celebrities involved either as investors or on the board of their entity in order to give an air of credibility and attract other people to invest with them and we see that very often," said Dan Schorr, of Kroll Advisory Solutions, who has no connection to the case.

The SEC says that Osorio 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.

Another one of Osorio's alleged victims was Miami businessman and lawyer Chris Korge, who says he met Osorio in 2008. The two men became close and Korge eventually invested $4 million in InnoVida, he says.

"Everything about the company added up," Korge told ABC News. "Once he got everything he could get from me, I started to notice the interaction I had with him started to slow down,"

Korge and others eventually filed lawsuits against Osorio, forcing InnoVida into bankruptcy in 2011 and his Star Island mansion was auctioned off.

"He convinced me that this was the opportunity of a lifetime," Korge said. "He was a fraudster and a sociopath."

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Dewey,CheatemAndHow

He stole FOUR MILLION from a lawyer. This guy is my hero !!!

December 17 2012 at 7:42 PM Report abuse rate up rate down Reply
Cristo

Many millionaires living in mansions are crooks. They deceived many people to get the money the have. We should try to be honest and get all our things the legal way. http://tiny.cc/citygoods

December 11 2012 at 7:31 AM Report abuse rate up rate down Reply
donut999

Hope they let him keep his award. Should make a nice cell decoration.

December 11 2012 at 5:38 AM Report abuse rate up rate down Reply
gop4ever3

I see nothing wrong with what he did. He is just being a capitalist. He was left no choice with all the strict regulations we have in place. We need less regulation, I'm sure he will be cleared of any wrong doing.

December 10 2012 at 11:41 PM Report abuse rate up rate down Reply
ranes54

Well, there goes Jeb's presidential aspirations down the drain!

December 10 2012 at 5:13 PM Report abuse +2 rate up rate down Reply
Somey

To the GOP scamming is good Entrepreneurship.

December 10 2012 at 4:56 PM Report abuse +3 rate up rate down Reply