Put me down as skeptical that Jeb Bush will ever run for President. But if he does, his future campaign hit a small bump in the road today. Saturday’s Miami Herald reports high-flying Miami businessman Claudio Osorio was arrested over the weekend on federal fraud charges. Looking at the indictment it’s a familiar story. Act fancy and live large. Get some big wigs to go into business with you and then start shaking down gullible richies who will invest in your company which is little more than a Potemkin village.In Osorio’s case it was InnoVidia, which the Herald describes as “cutting-edge producer of fiber-composite panels, which interlocked similar to Legos, and could produce affordable housing and post-disaster shelter in places like New Orleans, Haiti and developing countries overseas.” How could such a boffo idea not pan out?
Anyway, it seems the whole thing was basically a scam, if not a pure scam then a company built, allegedly on various lies and false representations to potential investors. And that’s where we get to Jeb Bush, former Governor of Florida. In separate civil charges filed on December 7th, the SEC alleges that “To add an air of legitimacy to InnoVidia, Osorio recruited a high-profile board of directors for InnoVidia that included a former governor of Florida.” i.e., Jeb Bush.
To be crystal clear, there’s nothing in any of material suggesting Bush knew Osorio was a crook let alone participated in the fraud. But his responsibility, as a member of the firm’s board is significant and his place on the board seems to have had the effect Osorio intended.
From the Herald article, the story of one of Osorio’s dupes.
Chris Korge, a shrewd Miami developer and lawyer, said Osorio assured him that his company had about $40 million in cash and a lucrative deal with Middle Eastern investors to purchase $500 million in company stock. Korge invested $4 million before he began to suspect that something didn’t add up.
“Jeb Bush was on the board, there were a lot of successful people convincing me. We went out and we met and I just began to realize that the cost-effectiveness of building with the materials would never work,” Korge said. By that time, however, it was too late.
Creditors were already knocking on Osorio’s door, including the Swiss government, which claimed he owed $220 million in loans from Swiss banks that he obtained by lying about the soundness of his previous business venture, Miami-based CHS Electronics. That company went bankrupt in 2000.
Lawsuits by Korge and others eventually brought Osorio’s company to the ground. But they weren’t the only ones he defrauded. He allegedly also defrauded the federal government of “the $10 million they were given to help finance construction of a Haitian factory to build homes for hurricane victims.”
I’ll be curious to see the day two stories on this one.