Entries in Miami (4)


Miami Businessman Arrested for Allegedly Stealing Millions from Investors

Adam Gault/Thinkstock(MIAMI) -- 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 on 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 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.

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."

Copyright 2012 ABC News Radio


Mega-Rich Foreigners Heat Up Miami's Luxury Condo Market

George Doyle/Stockbyte/Thinkstock(MIAMI) -- Miami's luxury real estate market is a crystal-chandeliered world of multi-million-dollar condo deals, where prospective buyers roll up to open houses in Lamborghinis or on 70-foot-long yachts.  It's not only booming, say its mavens, it may be passed peak.

A few years ago, multi-million-dollar condo deals were unheard of in the United States because the luxury market had gone bust with the rest of the country.  But now, real estate experts say the market is turning around and astronomical listings are popping up in small real estate bubbles from coast to coast.  Unlike the subprime mortgage scandals, almost all of Miami's expensive real estate is bought and paid for with cash, mostly by foreigners.

Danny Hertzberg, a member of Forbes magazine's real estate "30 Under 30" list, gave up being a lawyer to become a real estate agent for Coldwell Banker in Miami.  The 29-year-old said real estate in this tropical mainland paradise keeps getting more expensive, especially in the last couple of months.

"Top buildings are selling now, per foot, at the height of the market," Hertzberg said. "There was a lot of inventory, maybe, 18 months ago, and then all of a sudden, there was a lot of foreign investment to the Miami market, people coming in from Brazil, Venezuela, Argentina, a lot of Russian buyers, specifically on the high end luxury."

According to the city of Miami, the luxury condo market is hotter than at any point in history.  Nearly 20 percent more million-dollar condos were sold in 2011 than in the previous peak year of 2006.

This is an "other world," where the rest of America's real estate metrics don't really apply.  Most of the country is still creaking into recovery, where home ownership is at a 15-year low and property values are expected to stagnate the rest of the year after prices have been plummeting for the past four years.  But for the super wealthy, the mega-rich "1 percent-ers," a luxury condo bidding war has replaced the recession, not just in Miami, but also in New York and Los Angeles.

The multi-million-dollar luxury market has become so hot, Bravo made a reality TV show about it called Million Dollar Listings, which started in L.A. and then was exported to New York.

So is this just a repeat of what happened during the 2008 housing crash, only on an accelerated level?  Jonathan Miller, the president and CEO of Miller Samuel, a real estate appraising and consulting firm, said that's not the case because luxury condos only make up a "tiny sliver" of the entire housing market.

"It's a fraction of a percent and it's disconnected from the market in general," he said.  "Any time you have a pick-up in activity in real estate, you're influencing the local economy, from goods and services to taxes being paid, it's a win for the local economy."

Copyright 2012 ABC News Radio


Bank of America To Pay $410 Million in Overdraft Suit Settlement

Photo Courtesy - Getty Images(MIAMI) -- In a settlement unsealed Friday, Charlotte, N.C.-based Bank of America agreed to pay $410 million to complainants who allege the bank used deceptive and manipulative methods in order to extract more money from clients who over drafted their debit accounts.

The settlement, dated January 27, results from a class action lawsuit against several banks including Citigroup Inc., JPMorgan Chase & Co., and Wells Fargo & Co. Several cases from across the country were consolidated into one in 2009 and handled in Miami federal court.

Ralph Torres, the man who filed suit against Bank of America in 2000, said in court documents that the bank would re-order his transactions so that the largest amounts would be debited from his account first. Torres also said the bank would delay processing smaller transactions, making it appear as if he had more money in his account than he actually did, thus allowing him to feel comfortable to continue spending.

Lawyers for the bank responded in court documents claiming that larger transactions were processed first because they usually are higher priority payments like bills and loan payments.

According to the Center for Responsible Lending, overdraft fees cost customers $10 billion in 2004, $17.5 billion in 2006, and $23.7 billion in 2008

Bank of America said it has since revised its policies to decline debit purchases if a customer does not have sufficient funds, and has introduced new accounts that will prevent excessive overdrafts.

Copyright 2011 ABC News Radio


Latinas Open New Small Businesses at Six Times National Average

Photo Courtesy - Getty Images(MIAMI, FL) -- Washington's emphasis on small business as the engine of the economy is not falling on deaf ears in the Hispanic community.  It's especially resonant with Hispanic women who are opening small businesses at six times the national average.

Nationwide, more than 750,000 businesses -- 37 percent of all Hispanic businesses -- are owned by Latinas and generate close to $50 billion in revenues, reports the Miami Herald.  It may be much more than a hunger for self-determination driving them.  It's an economic necessity that they take matters into their own hands.  Non-Hispanic women are making 79 cents for every dollar that a man makes, but 2009 U.S. Census data show Latinas earn 59 cents.

Its not easy.  Forty-two-year-old entrepreneur Irela Bague told the Herald she is always on the run. "My days are schizophrenic, but I'm a single mom and I own my own company and I'm the chair of a large charity in our community -- the Girl Scout Council of Tropical Florida -- and my days go from one thing to another.''

The Washington D.C.-based National Hispana Leadership Institute is bringing its annual conference and  Awards gala to  Miami Thursday and Friday.
Copyright 2010 ABC News Radio

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