A colorful and popular socialite was arrested on Friday for fraud related charges. Claudio Osorio, along with his business partner, Craig Toll, were indicted on multiple fraud and money laundering charges. Osorio, a prominent Miami millionaire, is accused of defrauding numerous people into investing in his company Innovida. Osorio and Toll are being represented by Miami criminal attorneys. Some of Osorio's alleged victims include several current and former NBA player, such as Alonzo Mourning, Dwight Howard, Carlos Boozer and Howard Eisley. Osorio's. other victims allegedly caught up in the fraud include his neighbor, a Tanzanian businessman, and a group of investors from the United Arab Emirates (UAE). According to prosecutors, Osorio was able to lure unsuspecting investors as he and his wife threw expensive parties and gave the appearance that they were very wealthy.
In 2005, Osorio created the company Innovida which was supposed to create and market fiber-composite panels which could be interlocked to construct affordable housing and shelters for post-disaster victims, such as those from New Orleans and Haiti. He claimed that his business was forming joint ventures with Europe, Latin America, Africa and Asia. According to court documents, Osorio was able to perpetrate the fraud by assembling high-profile individuals to sit on the board of directors to legitimize his company. He was able to secure $40 million from investors, as well as, a $10 million government loan. Osorio told investors that the company had $40 million in cash with another $500 million in cash on the way from Middle Eastern investors.
Not only is Osorio and his business partner being charged criminally in federal court, but the Securities and Exchange Commission has filed civil charges for defrauding investors by overstating the financial success of the company. The complaint alleges that Osorio stole nearly half of investors' money to pay for a lavish Star Island mansion, a Colorado retreat, a Maserati and to pay country club dues. To garner support from investors, he made large charitable contributions and hosted extravagant political fundraisers. Investors became suspicious when the numbers did not add up to make a profitable company. The Swiss government also sought $200 million in repayment in loans for a previously failed business. Osorio filed for bankruptcy last year and his multi-million dollar home was sold at auction.
Osorio and Toll will likely appear at a pre-trial detention hearing in the next 24 hours. Federal prosecutors can request from the magistrate presiding over the case to hold defendants without a bond. The magistrate will decide if pre-trial detention is appropriate by determining whether the defendants are a danger to the community and whether or not they are fligh risks. In determining whether defendants are flight risks, the magistrate will consider a defendant's ties to the community. Citizenship, properties overseas and family members residing in the jurisdiction will help the magistrate make that decision. If a magistrate finds that a defendant is not a flight risk and is not a danger to the community, he will set a bond commensurate with the charged and the amount of loss suffered by the alleged victims.
High-Flying Miami Millionaire was a Fraud, Feds Say, Miami Herald.com, December 8, 2012.