MIAMI Dec 7 A Miami businessman once named
"Entrepreneur of the Year" by tax and consulting firm Ernst &
Young was arrested on Friday and accused of leading a $40
million investment fraud linked to a company he owned that
promoted a cutting-edge design to build low-cost houses.
Claudio Osorio, 54, the former president of InnoVida
Holdings, and the firm's former chief financial officer were
indicted on two counts of wire fraud and one count of major
fraud, among other charges, the U.S. Attorney's Office in Miami
said in a statement.
They also face fraud charges by the U.S. Securities and
Exchange Commission for possible violations of federal
Osorio's arrest marks a dramatic fall from grace for a
prominent and politically connected businessman whose now
defunct company at one point claimed Jeb Bush, Florida's former
governor, among its board of directors, as well as former
presidential candidate Gen. Wesley Clark.
Before it entered bankruptcy last year, the Miami
Beach-based company drew some high-profile investor interest
that included Chicago Bulls basketball star Carlos Boozer.
Osorio, who was born in Venezuela, pitched the company and
its products as a possible solution to help build in developing
countries affordable houses that were resistant to fire and
InnoVida, he said, manufactured fiber composite panels that
could be used to build homes and other buildings without cement,
steel or wood.
Prosecutors said that Osorio defrauded investors from 2007
to 2010, exaggerating the company's finances and pocketing
millions of dollars to fund a lavish lifestyle.
In a statement, the SEC claimed that Osorio had illegally
used investor money to pay for a Miami Beach mansion, a Maserati
car and a Colorado mountain retreat home.
Osorio was forced to sell many of his assets as the company
slid into bankruptcy and some investors, concerned about the
company's finances, filed lawsuits against him, to get their
Boozer was among them. Last year, he sued Osorio, claiming
his $1 million investment had been used to bankroll the
businessman's "high-flying lifestyle," according to court
"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 Bustillo, the director of
the SEC's Miami Regional Office.
The indictment by the U.S. Attorney's Office in Miami said
that Osorio and his former Chief Financial Officer Craig Toll,
also applied for and obtained a $10 million loan from the
Overseas Private Investment Corporation (OPIC), a U.S.
The loan was intended to help build a manufacturing facility
in Haiti and 500 homes for families in Haiti after a devastating
earthquake in 2010 left about 250,000 people dead and more than
one million homeless.
Prosecutors said Osorio "used the OPIC loan proceeds to
repay investors and for his and his co-conspirators' personal
benefit and to further the fraud scheme."
In 1997, Ernst & Young awarded Osorio its "Entrepreneur of
the Year" prize for his work at a previous company he owned, CHS
Electronics. At the time, the company was one of the country's
leading electronics distributors.
In 1999, CHS Electronics said it had settled a class action
lawsuit brought by some shareholders. A year later the company
was declared bankrupt.
(Edited by David Adams)