Robert Shapiro pleaded guilty in a Miami federal court on Wednesday.
Robert Shapiro has pleaded guilty in federal court to charges related to a $1.3 billion Ponzi scheme he led as the CEO of Woodbridge Group of Companies.
Shapiro admitted that he “misappropriated” between $25 million and $95 million in investor funds to fuel his lavish lifestyle and over-the-top luxury purchases, according to the Miami Herald. Most of Woodbridge’s clients were elderly people who unwittingly invested their retirement funds in what turned out to be a Ponzi scheme.
Woodbridge representatives told investors the money would be invested in real estate, such as hotels and luxury properties, including many in the Los Angeles area, where Shapiro was living when he was arrested in April.
The guilty plea means the 61-year-old avoids a trial. He faces up to 20 years in prison for wire and mail fraud conspiracy, along with a maximum of five years for tax evasion. His sentencing is set for October 15.
Last fall he agreed to pay $120 million to the Securities and Exchange Commission as part of a civil settlement with the federal watchdog agency, which will be used to compensate Woodbridge’s victims.
The scheme first started to show cracks in late 2017, when news broke that the SEC was investigating the company for fraud. The SEC continues to pursue charges against Woodbridge associates and in December, the agency charged 13 individuals and 10 companies related to Woodbridge.
Lawyers tasked with recovering funds for investors are also pursuing compensation from Comerica Bank, where Woodbridge held accounts, alleging the bank “turned a blind eye” to the scheme. [Miami Herald] — Dennis Lynch