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US court hands 25-year sentence to Woodbridge Group CEO for $1.3B fraud

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US court hands 25-year sentence to Woodbridge Group CEO for $1.3B fraud

U.S. District Judge Cecilia Altonaga in Miami sentenced Woodbridge Group of Cos. LLC's former CEO Robert Shapiro to the maximum sentence of 25 years in prison for orchestrating a $1.3 billion Ponzi scheme, Bloomberg News reported.

Shapiro defrauded more than 7,000 retirees and other investors by promising returns as high as 10% from investments in loans to property developers. The money from new investors was used to repay earlier investors and to buy luxury homes, wines, paintings and custom-designed jewelry for his wife at a cost of $36 million, the report said.

The prosecutors claim Shapiro moved money through a network of 270 limited liability companies that he controlled. Government figures put the total loss to investors at $450 million.

In January, the U.S. District Court for the Southern District of Florida ordered Woodbridge and Shapiro to pay about $1 billion in penalties and disgorgement, which was consented to by the defendants.

The U.S. Department of Justice in April charged Shapiro and directors of investment Dane Roseman and Ivan Acevedo in the Southern District of Florida with conspiracy to commit mail and wire fraud. Shapiro and Roseman were also charged with substantive wire fraud counts, while Shapiro was additionally charged with conspiracy to commit money laundering and evasion of payment of federal income taxes. The three executives were arrested in California then, with Shapiro detained in prison.

Shapiro pleaded guilty to conspiracy and tax evasion in August, the report said.