Become a member of The Cuenca Dispatch and access exclusive weekly reports on Ecuador's economy, politics, crime and more that you will not find published anywhere else on the web.

Ecuador's Original English Language Newspaper

Ecuadorians’ investment firm defrauded South America’s wealthy out of over $350 million

Published on February 08, 2022

If you find this article informative…

Members receive weekly reports on Ecuador’s economics, politics, crime and more. Plus, NO ADS.

Start your subscription today for just $1 for the first month.

(Regular subscription options $4.99/month or $42/year/)

Click here to subscribe.

Investigations reveal that Ecuadorians Roberto Cortés and Ernesto Weisson created a network of fraudulent investments that operated in Ecuador, Venezuela, Argentina, Uruguay, and Brazil.

There are now more than 40 criminal, civil and bankruptcy court cases in the US court system related to the Biscayne Capital network.

Biscayne Capital is an investment firm that is at the heart of one of the biggest private scams in recent times. The losses total more than $350 million, according to the filings of defrauded clients and liquidators.

The Biscayne Capital network brought together more than 30 companies in Miami and Delaware, in the United States, and in tax havens, such as the Cayman Islands, Bermuda, Panama, the British Virgin Islands, Belize, Curaçao and Switzerland.

Behind Biscayne Capital are the so-called “Miami Boys,” two Ecuadorians who created the scheme, and who now face criminal proceedings in the United States for fraud and money laundering.

They are Roberto Cortés Ripalda (54 years old) and Ernesto Weisson Pazmiño (53 years old), who started the scheme in 1999.

The birth of the scam

The lawsuits filed by the liquidators of the companies, which were part of the Biscayne Capital network and operated in the Cayman Islands, show the beginnings of the massive scam.

According to these records, it all started in the 90s, when Cortés and Weisson began to develop real estate projects in Miami with great success. Cortés is an architect and Weisson, a financial expert.

In 2003 they created the company South Bay Developers Group, which specialized in the construction of luxury real estate projects in Key Biscayne, with loans and traditional financing. As part of their activities, they founded their first network of 17 companies.

Due to their success, they were presented with the opportunity to buy 30 vacant lots in the exclusive Ocean Reef sector, in Key Largo (south of Miami). They began negotiating the acquisition in late 2005.

To make the purchase, the Miami Boys divided the lots into three groups and created three companies, called Ocean Reef I, II and III. They then acquired a 90% stake in each of the three companies that own these lots.

By the end of 2009, they managed to acquire the remaining 10% stake. And with it, they were able to develop the Ocean Reef project.

Friends with money

To finance the real estate projects, the two Ecuadorians created Biscayne Capital Holdings, a Delaware-based company, and Biscayne Capital Ltd., based in the British Virgin Islands.

These two companies were the start of the network of firms based in various countries that would grow from 2005 onwards.

The basis of the Biscayne Capital scheme were the good relations that Weisson and Cortés had with Ecuador’s ‘high society.’

According to the investigation of the liquidators of the companies in the Cayman Islands, both characters had “long-standing relationships” with wealthy Ecuadorian families.

The Miami Boys took advantage of the fact that these people were looking to make investments outside the country, since in January 2007 Rafael Correa was sworn in as President of the Republic, with a speech against the “oligarchy.”

Because Cortés and Weisson needed money for their real estate investments in the United States, they created the Sentinel Investment Fund—in the Cayman Islands—in 2007. This company offered certificates of deposit with guaranteed earnings.

To offer these certificates, Biscayne hired two financial advisors: Ecuadorians Frank Chatburn, Cortés’s nephew, and Edith Hinojosa, who were working from Ecuador looking for investors. Both already had a portfolio of clients to whom they could offer Sentinel certificates.

Weisson and Cortés also created Biscayne Capital, SA, based in Uruguay, in 2008. There they hired Argentine Fernando Haberer as a financial adviser, who also had his own client portfolio and relationships with wealthy families in the ‘Southern Cone.’

All advisors offered low-risk investments and high interest payments, which were supposedly used in the development of real estate projects.

The growth of Biscayne

Through 2010, Chatburn, Hinojosa, and Haberer sold millions of dollars’ worth of Sentinel certificates.

Faced with the success of their business, Weisson and Cortés decided to create new special purpose companies in the Cayman Islands to expand their operations.

These firms used the so-called “prop trading,” a highly speculative scheme for the issuance and sale of paper.* The companies were created thru 2011, and their names were:

  • SG Strategic Income Ltd.
  • Diversified Real Estate Development Ltd.
  • GMS Global Market Step Up Note Ltd.
  • Preferred Income Collaterized Interest Ltd.

The objective of these companies was to raise resources to invest in different real estate projects in Ocean Reef, but also in the projects of another firm: Vanguardia Group Inc.

The owners of Vanguardia were Weisson, Cortés, the latter’s father and brother (Roberto Cortés Rueda and Juan Carlos Cortés). The company owned a vacant lot in Miami’s North Bay Village area.

Biscayne made double profit with the “prop trading ” scheme since the client paid a fee to the issuing company and another to Biscayne for managing their investments.

The same Biscayne Capital employees offered these papers to investors, pension funds and groups of people looking for a safe alternative to put their money outside the country.

With business going well, Biscayne hired new financial advisers, all with portfolios of wealthy clients to invest in. This is how they came to have investors from Ecuador, Venezuela, Argentina, Uruguay, and Brazil.

The offices in Miami were in the luxurious area of ​​Brickell, in a historic mansion where the “Miami Boys” even opened an art gallery. The property was acquired with income from the papers and Sentinel certificates.

The beginning of the end

Although things seemed to be very successful in Biscayne Capital, the reality was different. In July 2012, the United States Securities and Exchange Commission (SEC) began investigating the company.

To dodge the SEC, all of Biscayne’s assets that were in the company’s name in Delaware were transferred to Biscayne Holdings in the Cayman Islands.

The owner of this new company (which is also now in liquidation) was North Pointe Holdings, which was owned by Haberer.

With this movement, Biscayne Capital was outside the jurisdiction of the SEC and Cortés and Weisson thought they evaded their control.

But, again, in 2014, the SEC started another investigation, leading Biscayne to undergo a reorganization. Its partners created a screen of companies and trusts in tax havens to hide the real ownership of their companies and real estate.

That year, the Miami Boys opened the firm Madison Asset, also based in the Cayman Islands, which oversaw providing custody and administration services for Biscayne Capital.

But in 2016, the SEC administratively sanctioned the Miami Boys for not having informed their clients how their investments really worked and for not having disclosed the conflict of interest between all the companies in the network.

In other words, it was never revealed to the clients of the paper issuers that these firms belonged to the same owners as Biscayne and South Bay.

According to the investigation, South Bay had been in financial trouble since 2007. The company’s liabilities increased from about $22.5 million at the end of that year to more than $130 million at the end of 2012, something that was also not communicated to investors.

The fallout

After the sanction by the SEC, investors began to demand that their capital be returned their companies in the Cayman Islands began to be liquidated, though much of the money they had taken from clients was untraceable.

The liquidators of the issuing firms of the papers and the liquidators of Madison Asset point to Deutsche Bank for lack of controls, saying this bank managed the custody of a large part of the investments of the Biscayne network.

The affected clients are divided into several groups, but some have filed an arbitration before the Financial Industry Regulatory Authority (FINRA) against the Raymond James bank; this led to a counterclaim.

Others have sued Biscayne Capital directly, and others have sued Insight Securities, which acted as a broker or intermediary.

Cortés, Weisson and the Haberer are now being prosecuted for bank fraud, conspiracy, and money laundering.

Chatburn pleaded guilty and is serving a 42-month prison sentence for money laundering for his participation in the corruption scheme of the Ecuadorian state oil company Petroecuador.

Hinojosa faces multiple civil lawsuits for her participation in the network. No lawsuit has been filed against her in Ecuador.

* Proprietary trading— also known as “prop trading”—refers to a financial firm or commercial bank that invests for direct market gain rather than earning commission dollars by trading on behalf of clients. This type of trading activity occurs when a financial firm chooses to profit from market activities rather than thin-margin commissions obtained through client trading activity. Proprietary trading may involve the trading of stocks, bonds, commodities, currencies, or other instruments.


  1. Edith Hinojosa is happily living in Orlando Florida pretending to be bankrupt, working in a day care waiting for the statute of limitations to transpire on her crimes and get re-acquainted with her money together with her co-conspirators Akerman LLP


Submit a Comment

Your email address will not be published. Required fields are marked *

Share This