MIAMI (CN) - Miami entrepreneur and political fund raiser Claudio Osorio stole half the $16 million he raised by misrepresenting to investors the success of his housing materials company, the SEC claims in court.
The SEC sued Osorio, his company InnoVida Holdings LLC, and Craig Toll, a CPA who was CFO of InnoVida.
"From no later than March 2007 until at least March 2010, InnoVida, a purported manufacturer of hurricane and fire-proof housing materials; and Osorio, the company's president, raised approximately $16.8 million from at least five investors by offering and selling securities in the form of units and loan instruments in InnoVida," the complaint states.
"Osorio was active in local and national politics as a fundraiser for political candidates. To add an air of legitimacy to InnoVida, Osorio recruited a high-profile board of directors for InnoVida that included a former governor of Florida. Osorio solicited investors through one-on-one conversations, sometimes during political fund-raising events.
"To lure investors, toll, the Company's CFO, created financial statements showing InnoVida had more than $35 million in cash and more than $100 million in equity.
"Osorio told at least one potential investor InnoVida was valued at $50 million, and another the company was valued at $250 million. Osorio also told potential investors he was InnoVida's largest stakeholder and had invested tens of millions of his own money into the company.
"All of these statements were false. Toll's financial statements artificially inflated the company's cash by nearly twentyfold. InnoVida was never valued at $50 million, let alone $250 million. And Osorio never invested tens of millions into the company.
"Osorio also enticed investors to increase their investments by guaranteeing a Middle Eastern sovereign wealth fund would purchase investors' shares for profits of approximately 900 percent by a date certain.
"This claim was patently false. The Middle Eastern sovereign wealth fund investment was a ruse to solicit additional funds from investors.
"Contrary to Osorio and InnoVida's representations to investors about how they would spend the money, Osorio misappropriated nearly half of investors' funds, or approximately $8.1 million, to support his lavish lifestyle."
Osorio raised political contributions for Democrats, according to press reports.
The SEC seeks disgorgement, penalties and an injunction.
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