Miami tech ‘investor’ arrested in Sliema, days after US files fraud charges

Chilean national who fled the U.S. – and sought citizenship in Malta – is accused by the US Securities and Exchange Commission of defrauding investors some $7.4 million

Alberto Chang-Rajii appeared in court this afternoon as a court heard requests for his extradition (Photo: Chris Mangion/MediaToday)
Alberto Chang-Rajii appeared in court this afternoon as a court heard requests for his extradition (Photo: Chris Mangion/MediaToday)

Chilean businessman Alberto Chang-Rajii has appeared in court to answer a request for his extradition issued by his homeland, after being arrested in Sliema this afternoon.

Magistrate Caroline Farrugia Frendo heard lawyers explain the circumstances surrounding the request.

Chang-Rajii, who fled the United States earlier this year, is also wanted in Chile for economic crimes charges. He had applied under the Individual Investor Programme, in the hope of acquiring a Maltese passport in March 2015 and was granted a residence permit by Identity Malta, according to media reports. But soon after charges were issued against him, Identity Malta revoked the residence permit.

Chang-Raji’s defence lawyer, Stefano Filletti, requested bail, to objections from lawyer Vincienne Vella from the Office of the Attorney General, who argued that the case was very serious. 

The prosecution argued that Chang-Raji had no links with Malta and there was the risk of him absconding. She reminded that this had happened before in similar cases.

Filletti pointed out that from the documents presented in court, it could be observed that the original warrant was issued in April and the Maltese warrant was issued yesterday. He went on to present press clippings in which Chang-Raji was quoted as saying he was aware of the Chilean extradition request, and that he had every intention to challenge the proceedings.

The defence argued that the man never fled the island. In addition, the prosecution had to bring a valid reason to deny bail as the right to liberty is enshrined in the Constitution.

Other countries always seek their interest when determining extradition, Filletti argued, adding that in fact, when a couple of years ago, Malta requested the extradition of a Chilean national, they had refused outright. "We are not seeking a refusal but that his fundamental rights be respected. “

It was also submitted that Chang’s address had been known to the authorities for several months due to his IIP application and in fact he had been arrested at home. FInally, as he was not an EU national he did not enjoy Schengen freedom of movement without passport controls.

The Court granted bail against a deposit of €2,000, ordering the man to remain under house arrest.

In the States, the US Securities and Exchange Commission (SEC) had charged Chang, the owner of Miami Beach-based asset management company Onix Capital, with fraud and froze the fund’s assets.

Onix Capital and its owner are accused of having defrauded investors in promissory notes that “guaranteed” annual returns of 12% to 19%, also having misled others who were told their funds would be invested in start-ups which had good potential for growth.

Chang-Rajii and Onix Capital are accused of having falsely depicted Chang as an award-winning multi-millionaire angel investor with an M.B.A. from Stanford University.

The SEC found that Chang-Rajii and Onix Capital had sold more than $5.7 million (£4.5 million) in Onix promissory notes that they falsely claimed to be guaranteed by Chang, and raised more than $1.7 million that Chang promised to invest in companies such as Uber, Snapchat, and Square. However, the investor funds were instead diverted to Chang and used to pay other investors.

Chang’s alleged scheme had started to fail in March, when US and Chilean news reports exposed the misrepresentations. Chang fled the US for Malta, transferring some $4 million – thought to include Onix Capital investor funds- to various banks in Australia, Malta, Switzerland and the UK.

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