Once a dashing Miami businessman who traveled around the globe, Claudio Osorio sat in a federal courtroom Wednesday as a contrite con man wearing a khaki inmate jumpsuit, tortoise-shell glasses and a toupee.
Osorio, who had pleaded guilty earlier this year to stealing millions of dollars invested in his latest ill-fated venture, apologized profusely for his crime — to investors, former employees and family members.
“I betrayed all the faith and belief they deposited in me,” Osorio, 54, told U.S. District Judge William Dimitrouleas. “I failed them.”
The Fort Lauderdale judge sentenced Osorio to 12 1/2 years in prison for fleecing investors in his failed start-up to manufacture high-tech construction materials for low-cost housing in developing countries such as Haiti.
Dimitrouleas also ordered Osorio, who has been held without bond at the Miami Federal Detention Center since his arrest int December, to pay back about $24 million to investors in his defunct company, Innovida Holdings, Inc. The 2011 sale of Osorio’s heavily mortgaged Star Island home for $12.7 million yielded about $3.4 million for his investors.
The judge gave Osorio credit for pleading guilty to three conspiracies of wire fraud and money laundering and accepted the recommendation of prosecutor Lois Foster-Steers that he receive a 10 percent sentence reduction under federal guidelines. But Dimitrouleas still imposed a sentence that nearly equaled the low end of those guidelines — ranging from 12 1/2 to 15 1/2 years — saying Osorio committed “extensive fraud.”
Osorio’s defense attorney, Humberto Dominguez, had hoped his client would receive less than 10 years in prison, arguing that he accepted his criminal responsibility, helped prosecutors in their trial against his company’s former chief financial officer, cooperated with lawyers in a parallel bankruptcy action and gave generously to charities.
Osorio also pleaded guilty so that his wife, Amarilis, an “unindicted coconspirator,” would not be charged, said Dominguez, who nonetheless added that prosecutors “did not have sufficient evidence to proceed against her.”
Osorio, a Venezuela-born entrepreneur, and his wife once hosted fund-raisers in their Star Island waterfront home for presidential candidates Hillary Clinton and Barack Obama.
After running a Fortune 500 computer-distribution company called CHS that went bankrupt in 2000, Osorio launched Innovida Holdings on the promise that he could manufacture fiberglass building panels in Miami and other parts of the world and turn a substantial profit. But that start-up got him into serious trouble with investors and the feds.
FBI agents built a fraud case against Osorio after some of his investors, including NBA basketball stars, accused him of using his new Miami Beach-based company to swindle them and the U.S. government.
According to an indictment, Osorio conspired to fleece $40 million from 10 investors and an additional $10 million from a federal government program between 2006 and 2011. The government grant was for building 500 homes in Haiti after its devastating earthquake in January 2010.
Instead, Osorio moved investors’ money to off-shore bank accounts in the Cayman Islands. The bankruptcy trustee of his failed company, attorney Mark Meland, said he could not recover any money there because it was either spent on Osorio’s extravagant lifestyle or squandered.
The main investor who legally confronted Osorio: Miami businessman and attorney Chris Korge, who sank $4 million into Innovida, including $3 million borrowed from his close friend, Miami-Dade lobbyist and businessman Rodney Barreto. Korge urged the judge to give Osorio a harsh sentence, calling Osorio’s crime “a disgusting fraud.”
On Wednesday, Korge noted that Osorio’s courtroom apology was the first time he had ever heard his former friend and business partner show any remorse. Korge called Osorio a “master” at hustling people.
“There’s a lot of missing money, and believe me, it’s not in the United States,” Korge told the judge.
He also accused Osorio’s wife of being in on the scam. “She was, in my opinion, as guilty as he was, if not more so,” Korge said.
Others who saw potential profits in Osorio’s new company included NBA star Carlos Boozer, former Miami Heat center Alonzo Mourning, a Tanzanian businessman, a group of United Arab Emirates investors and a former Star Island neighbor.
Osorio’s wife was not present in the courtroom. Only one of the couple’s three children, Nicholas, attended the sentencing hearing.