For years, Alberto Chang-Rajii charmed Miami power brokers with his rags-to-riches story of immigrating from Chile to attend Stanford University, meeting Sergey Brin and Larry Page, and investing in Google before the company blew up. He turned that origin story into a multimillion-dollar tech investment fund and a board seat with Endeavor Miami.
But that amazing backstory, as New Times reported in March, was a total fabrication. And now federal investigators say Chang-Rajii's investment firm was built on lies.
Chang-Rajii has been charged today with fraud by the Securities and Exchange Commission, which says he and his company raised $7.4 million by falsely promising huge returns and investments in buzzy tech startups — while in reality simply using that cash to pay off old investors and to fund Chang-Rajii's lifestyle.
“According to our complaint, Chang and Onix Capital guaranteed returns and touted Chang’s wealth and investment success to entice investors,” Eric I. Bustillo, director of the SEC’s Miami regional office, says in a release. “However, Onix’s purported investment revenue was non-existent and Chang’s claims about his background were not true.”
The charges won't mean a quick end to Chang-Rajii's tale of deceit, however. After New Times and various journalists in his native Chile began questioning his backstory, Chang-Rajii fled Miami, moved millions of dollars overseas, and essentially disappeared in Malta.
Chang-Rajii swooped into Miami's tech scene with a magazine-profile-ready biography. At speeches from tech conferences to universities, he told of winning a scholarship to Stanford in 1996 and meeting Brin and Page as they cooked up their web search company.
"I had $10,000 saved. My math was either to buy a 1996 Mitsubishi Eclipse convertible... or, then again, follow this guy, who was named Sergey Brin, and invest in 1 percent in Google," he told one audience.
But in March, Stanford told New Times it had no record of Chang-Rajii attending. And early Google investors and experts said they'd never heard of him.
By then, Chang-Rajii had become a prominent face in Miami's growing tech startup scene through his companies, including Onix Capital LLC. He snagged a board seat with Endeavor Miami, a tech incubator with a $2 million Knight Foundation grant, and sponsored a showcase with the eMerge conference.
He quickly backpedaled on his Stanford claims and resigned from Endeavor but tried to assure investors his company was secure — despite increasingly dire reports from Chile. Then, by April, he was on the run, first to Chile and then to the Mediterranean isle of Malta.
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Now the feds say his whole enterprise was a sham. Using his bogus Stanford story and false claims about his personal wealth, he sold more than $5.7 million in promissory notes falsely pitched as guaranteed by his fortune, the feds say, with promises of incredible 12 to 19 percent annual returns. He also illegally raised $1.7 million that he claimed would be invested in Snapchat, Uber, and other tech companies.
Instead, all of that money just went to pay old investors and to fund Chang-Rajii's life, prosecutors now say. They also say that when he fled to Malta, he sent $4 million worth of the illegal proceeds to banks in Malta, the United Kingdom, Switzerland, and Australia.
It's not clear whether the feds will be able to extradite Chang-Rajii to Miami to face charges.