Woodbridge Ponzi scheme mastermind Robert Shapiro sentenced to 25 years in prison - TCPalm

The owner of a company accused of defrauding over 50 Treasure Coast residents in a nationwide Ponzi scheme was sentenced to 25 years in prison Tuesday.

Robert H. Shapiro, 62, defrauded 8,400 investors of $1 billion, including more than 2,000 who lost their retirement savings, according to court documents. Among those investors are 54 residents of the Treasure Coast.

Associates Dane Roseman and Ivan Acevedo are also facing criminal charges in managing the Woodbridge Ponzi scheme, which court documents say Shapiro masterminded.

More: Treasure Coast seniors bilked of savings

In April, the court charged Shapiro with 10 counts, including:

• 5 counts of mail fraud
• 2 counts of wire fraud
• Conspiracy to commit both mail and wire fraud
• Conspiracy to commit money laundering
• Evading paying federal income taxes.

In August, Shapiro pleaded guilty to two counts: conspiracy to commit mail and wire fraud, and evading paying federal income taxes. 

Ponzi scheme

Brokers selling Woodbridge securities promised investors big returns in a short amount of time, including as much as 6% monthly interest payments on $100,000 investments.

Investors thought they were earning profits off short-term construction loans made to third-party borrowers. In reality, their money was shuffled around more than 275 shell companies to make it appear the money was being loaned.

Money raised from new investors was used to pay previous investors, until the business model collapsed in early December 2017 and the company declared bankruptcy. 

Bankruptcy, SEC lawsuit 

After a year-long investigation, the Securities and Exchange Commission filed a lawsuit against the company two weeks after it declared bankruptcy.

In January, the court ordered the Woodbridge Group of Cos. to repay nearly $900 million in profits and ordered Shapiro to pay a $100 million penalty and over $20 million in profits and interest.

More: Woodbridge, Robert Shapiro fined in billion-dollar Ponzi scheme

After the company emerged from bankruptcy in February, it made its first payments to Woodbridge investors in late March, according to the website for the trust managing the liquidation of the company.

Future disbursements are expected, though the amount and timing are unknown. The entire wind-down period is expected to last two to three years.

Investors may recover anywhere between 30% and 60% of their original investment, according to a letter from the liquidation trustees. 

Scroll down for contact information for investors who need help.

Class action lawsuit

A group of victims settled a separate class action lawsuit in June against individual brokers who sold them the Woodbridge investments, court documents show. This lawsuit was in addition to the bankruptcy and liquidation proceedings, the civil lawsuit filed by the SEC and the criminal case against Shapiro and two of his associates. 

More: Woodbridge class-action suit expands to Treasure Coast brokers

Claims against three Treasure Coast brokers were at least partially dismissed between March and June:

• James H. Gilchrist in Fort Pierce
• Al Klager in Vero Beach
• Gordon C. Hannah in Stuart

The suit against Hannah was dismissed. The suit against Gilchrist was dismissed without prejudice, meaning the plaintiffs can file suit again. The case against Klager was dropped after the plaintiffs reached what the court called an "amicable resolution." 

A phone call to an attorney representing the investors, Jonathan B. Butler, was not immediately returned.

Forfeiture

In addition to a prison sentence, the court is requiring Shapiro to pay restitution by forfeiting $100 million to the government. 

Among assets Shapiro and his wife, Jeri, will forfeit to the court:

• 603 bottles of wine valued at nearly $450,000
• Seven paintings by artists such as Renoir, Picasso and Chagall, including two pieces purchased through Christie's Auction House for $260,000 each
• A 1969 Mercury Convertible
• Money spread across at least 13 bank accounts
• An assortment of jewelry that includes a nearly 10-carat emerald, an 11-carat ruby and more than 180 carats of diamonds.

A restitution hearing is scheduled for January.

Indicted associates

Roseman and Acevedo are alleged to have been successive managing directors of Woodbridge, according to the indictment, during which time they sold securities, created marketing and sales materials and trained sales agents to sell the securities. 

Acevedo was the managing director between 2013 and December 2014. Prosecutors charged him with one count of conspiring to commit mail and wire fraud, and one count of mail fraud.

Roseman worked in the managing director role from January 2015 to December 2017, when the company filed for bankruptcy, according to court documents. He faces one count of conspiring to commit mail and wire fraud, four counts of mail fraud and two counts of wire fraud.

Their trial is scheduled to begin in June 2020, with the next status hearing scheduled for Dec. 3, according to the court docket.

Investor information

The law firm representing the trust is Pachulski Stang Ziehl & Jones.

Phone: 310-203-4271 

Online: woodbridgeliquidationtrust.com

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