Before Jeb Bush joined InnoVida in 2007 as a $15,000 a month consultant there were many red flags that would turn any politician and even average citizen away. The company was involved in lawsuits, they were getting bad headlines and some of their top businessmen were convicted drug dealers.
Yet according to CNN, Jeb Bush joined the firm shortly after he left the governor’s mansion and Bush also became a member of the board and had stock options.Some speculate the former governor was not looking at the risks, he was simply looking to replenish his bank accounts after eight years of public service. Others believe Bush was caught up with the smooth talking CEO who in the end would end up in prison for running a $40 million investment fraud. All of Bush’s ties to InnoVida’s CEO and now inmate, Claudio Osorio are starting to surface since he is considering running for President.
Ken Boehm, chairman of the National Legal and Policy Center, a ethics watchdog group said:
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Completing this poll grants you access to Shark Tank updates free of charge. You may opt out at anytime. You also agree to this site's Privacy Policy and Terms of Use.It’s hard to imagine any due diligence investigation that would have missed lawsuit after lawsuit against Osorio alleging fraud, misrepresentation and ethics violations. . . Even if they were doing due-diligence lite, they would have found the lawsuits. These lawsuits weren’t hidden. They were in his home country.
A little more background on Osorio: he traveled in elite circles and hosted fundraisers and events at his multimillion dollar home in Miami.
Osorio also recruited Bush to work for the company because he felt Bush would add some legitimacy to InnoVida.Even though Bush was never accused of any wrongdoing, he did take away more then half the $470,000 InnoVida paid him and was a consultant for the company for three years.
Bush is taking the position that Osorio deceived him and other board members even though others argue he should have never worked for the company in the first place.
Bush’s spokeswoman, Kristy Campbell told CNN in an email:
Delving a little deeper into InnoVida’s background: one of the company’s owners was convicted on cocaine trafficking in 1990. A decade earlier to that a future board member was also busted with cocaine except this time he was accused of trying to board a flight from Fort Lauderdale, Florida with a pound of it in his underwear and another pound in his bag.It is now obvious that Mr. Osorio deliberately misled a board of prominent business leaders about his company’s dealings and that is why he is now in jail.
Even before Bush started working for the company, Osorio was accused by three lawsuits of financial wrongdoing and unethical behavior. Yet, Bush’s spokeswoman said prior to joining the company Bush hired a former federal law enforcement agent to conduct a background check on Osorio. She said that background check found:
no red flags indicating criminal or financial wrongdoing.
Court records tell a different story. They show things started hitting the fan for Osorio and he filed for bankruptcy in 2007. That was more then six months before Bush would sign on as a consultant to InnoVida.
InnoVida’s books also mirrored Osario’s faultering personal finances.
The criminal indictment against Osario also stated:InnoVida was not financially sound and profitable, and did not generate sufficient profits between 2007 and 2011.
Those years covered the majority of the time Bush was on the Board.
Nine months before Bush joined the company a judge even evicted the company from its space and ordered the sheriff to clear everyone from the premises. This is also stated in court documents. That judge also dismissed the case in June of 2008 but gave the landlord permission to take InnoVida back to court if they did not pay their rent again.
Osorio’s closest associates also left large paper trails.
Craig Toll was InnoVida’s chief financial officer. He went to prison for four years for his part in the company’s scam.Engin Yesil invested more than $8 million dollars in InnoVida to become part owner and apparently on the side he sold cocaine because he was arrested for same, plead guilty and was sentenced to six years in prison.
Remember the board member who tried to smuggle cocaine in his underwear? That was Harlan Waksal. His conviction was eventually overturned because the court ruled he had been illegally searched.
Waksal made headlines again when the company he co-founded, ImClone Systems was rocked by an insider trading scandal that sent Martha Stewart to federal prison.
Back to Osorio, he even scammed the government. In 2010, InnoVida received approximately $3 million from OPIC. OPIC is a government agency that helps American companies do business in developing countries. Osario was supposed the used the money to build a manufacturing plant and homes in Haiti after the earthquake but instead he used the money to pay investors and himself.
Bush eventually left the company in 2010. According to court documents, he was concerned about how the company was run.