Three businessmen at the center of an alleged $1.3 billion Ponzi scheme were arrested on Thursday, April 11 and charged with wire fraud, mail fraud, and money laundering. More than 10,000 investors lost money in the scheme.
Robert Shapiro, Dayne Roseman, and Ivan Acevedo were the CEO and two senior executives, respectively, of the Woodbridge Group of Companies. Woodbridge sold “first position commercial mortgages” on high-end real estate across the country.
Woodbridge promised investors, many of whom were elderly, returns of 5 to 10 percent. The scheme paid investors through a network of shell companies, allowing it to operate undetected for at least five years.
According to the Miami Herald, Woodbridge began to collapse in late 2017 when the company ran out of money to pay its old investors. In January 2019, Woodbridge agreed to pay $1 billion to the SEC following the resolution of a civil dispute between the two organizations.
Shapiro himself was required to pay $100 million in civil penalties, $18.5 million in ill-gotten gains, and $2.1 million in interest. Shapiro denies the current charges against him.
As part of the SEC settlement, funds acquired from liquidating Woodbridge’s real estate holdings will be used to pay back investors on a pro rata basis.
Source: Miami Herald
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