The Securities and Exchange Commission today announced fraud charges and an asset freeze against Miami Beach-based asset management company Onix Capital LLC and owner Alberto Chang-Rajii, a Chilean national who fled the U.S. earlier this year.
The SEC alleges that Chang and Onix Capital defrauded investors in promissory notes that “guaranteed” annual returns of 12 percent to 19 percent and bilked others who were told their funds would be invested in promising start-ups. Chang and Onix Capital also are alleged to have falsely depicted Chang as an award-winning multi-millionaire “angel” investor with an M.B.A. from Stanford University.
“According to our complaint, Chang and Onix Capital guaranteed returns and touted Chang’s wealth and investment success to entice investors,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “However, Onix’s purported investment revenue was non-existent and Chang’s claims about his background were not true.”
According to the SEC’s complaint unsealed Wednesday in U.S. District Court for the Southern District of Florida, Chang and Onix Capital sold more than $5.7 million in Onix promissory notes that they falsely claimed were guaranteed by Chang, and raised more than $1.7 million that Chang promised to invest in companies such as Uber, Snapchat, and Square. Instead, the SEC’s complaint alleges that investor funds were diverted to Chang and used to pay other investors.
The SEC’s complaint alleges the scheme began to unravel in March when reports published in the U.S. and Chile exposed the misrepresentations by Chang and Onix Capital. Chang fled to Malta and transferred approximately $4 million, including Onix Capital investor funds, to banks in Malta, the United Kingdom, Switzerland, and Australia.
Glenn S. Gordon, Associate Director of the SEC’s Miami Regional Office, said, “Once the defendants’ alleged misrepresentations were exposed, they stopped paying investors and shifted millions of dollars of investor assets offshore.”
The SEC’s complaint charges Chang and Onix Capital with fraud and seeks return of allegedly ill-gotten gains, prejudgment interest, and financial penalties, among other relief for investors. The Honorable Judge Marcia G. Cooke granted the SEC’s request for a temporary asset freeze against Onix Capital, Chang, and various relief defendants, and a hearing will be set by the court.
The SEC’s investigation was conducted by Sean M. O’Neill, Eric E. Morales, and Paul Hopker in the Miami Regional Office and supervised by Jason R. Berkowitz. The SEC’s litigation is being led by Mr. Morales and Andrew O. Schiff. The SEC appreciates the assistance of the Federal Bureau of Investigation, Chile’s Superintendencia de Valores y Seguros and Ministerio Público, the Malta Financial Services Authority, and the Australian Securities and Investments Commission.