Claudio Osorio

Claudio Osorio Mugshot - 2013

Claudio Osorio (Caracas, November 16, 1958), is a Venezuelan entrepreneur and convicted criminal based in Miami, Florida.

Biography

Osorio rose to prominence in the late 1990s due to the expansion of his company CHS Electronics, formerly a leading international distributor of microcomputers, peripherals, and software that went bankrupt after accounting scandals.[1][2] The next company Osorio founded, Innovida, also went through receivership and, ultimately, bankruptcy. Osorio is facing five separate lawsuits for fraud.[3] Investors claimed that millions had disappeared from Innovida's accounts.[3] He and his wife, Amarilis, are accused of defrauding a charitable effort to build homes in Haiti after the 2010 earthquake. Osorio filed for bankruptcy in 2011.[4] In December 2012, Osorio was arrested and charged with running a $40 million fraud.[5] In 2013 he was sentenced to 12 1/2 years in jail for fraud.[6]

CHS Electronics

CHS Electronics had been a public company since August 1994. In 1995, Osorio took it to Nasdaq's smallcap listing.[7] In 1997, CHS Electronics audited accounts reported $4.75 billion worth of sales, and net earnings of $48.3 million.[8] Also in 1997, a $475 million offering of CHS Electronics stock done by Raymond James & Associates [9] was the largest underwriting done outside New York on the year. Nearly 20 percent of the offering went to large foreign institutional investors via its European offices.[10]

By 2000, however, the share price of CHS Electronics had tumbled. Osorio's CHS Electronics filled for chapter 11.[1] Osorio has since been accused of civil fraud in several lawsuits, and was targeted by a $220 million Swiss criminal probe in relation to CHS in 2010.[11] It has also been reported that the SEC was investigating Osorio for "possible violations of federal securities laws."[12]

Innovida

On 2007, Osorio founded Innovida, which was a manufacturer of building materials:[13] “The company opened factories in North Miami Beach and several foreign countries. Osorio courted celebrities in January 2010 to sell the notion that he would help provide affordable homes to victims of the devastating earthquake in Haiti.”[14] However, a bankruptcy court judge ordered in December 2011 that Innovida be liquidated, after Osorio's “proposal to reorganize the debts of his former company, InnoVida Holdings, was filed in "bad faith" and includes a "nonsense" explanation for what happened to millions of dollars in missing funds.” [14]

Innovida received $3.5 million in loans from the US Overseas Private Investment Corporation (OPIC) to build homes in Haiti after the earthquake. In September 2011, OPIC began questioning Innovida's "negative operating cash flow."[15] A court appointed receiver in charge of investigating Innovida's finances indicated that "$37.5 million in funds had been moved offshore, but he had so far been unable to find out what happened to the money."[15]

Osorio and his former company, InnoVida, have been in bankruptcy since March 2011. After several multimillion-dollar lawsuits, Osorio was forced to put his mansion on Star Island for auction.[16][17]

Arrest & Criminal Charges

On Friday, December 7, 2012, Claudio Osorio, and Craig Toll, InnoVida’s CFO, were arrested in Miami, Florida after being indicted on two counts of wire fraud and one count of major fraud, amongst other charges.[18] Both Osorio and Toll also face fraud charges by the SEC for violations of federal securities laws.

Federal 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.[19] 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.[20][21]

Jeb Bush

Former Gov. Jeb Bush has agreed to return $270,000 out of $469,000 that he was paid as a consultant to Osorio.[22]

Hillary Clinton, Barack Obama, and the Democratic National Committee

Osorio held fundraisers for 2008 presidential candidates Hillary Clinton and Barack Obama in his Star Island mansion in Miami and The Democratic National Committee was also forced to return tens of thousands of dollars.[23]

References

  1. 1 2 CHS Electronics files for bankruptcy
  2. ↑ http://www.siliconinvestor.com/readreplies.aspx?msgid=8575501
  3. 1 2 Miami Business Man Sued For Fraud Over Haiti Homes
  4. ↑ Miami Entrepreneur Claudio Osorio Files For Chapter 11 March 19, 2011 CBS Miami
  5. ↑
  6. ↑ Miami businessman Claudio Osorio gets 12 years in prison for fraud conviction by Jay Weaver September 18, 2013 Miami Herald
  7. ↑ CHS Electronics common stock accepted for Nasdaq smallcap listing
  8. ↑ CHS Electronics Annual Report 1998
  9. ↑ Offerings expected this week of equity and convertible debt
  10. ↑ Raymond James Financial company history
  11. ↑ Claudio Osorio target in $220M Swiss probe
  12. ↑ SEC investigating Claudio Osorio
  13. ↑ Innovida Company Profile
  14. 1 2 Bankruptcy court judge reject Osorio's proposal
  15. 1 2 Agency asked InnoVida for proof of money trail
  16. ↑ Couple Accused of Haiti Fraud Declare Bankruptcy
  17. ↑ Claudio Osorio’s home is being prepared for auction on Nov. 3
  18. ↑
  19. ↑
  20. ↑
  21. ↑
  22. ↑ http://www.bizjournals.com/southflorida/blog/2013/03/jeb-bush-to-return-270000-of.html?page=all
  23. ↑ http://www.cnbcprime.com/american-greed/2015/02/26/the-greed-report-stars-they-get-scammed-just-like-us/
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