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Monday, Apr 22, 2024

Woodbridge Chief Pleads Guilty

Robert Shapiro, the former chief executive of Sherman Oaks-based Woodbridge Group of Cos., pleaded guilty this week to conspiracy and tax evasion charges related to his orchestration of a $1.3 billion Ponzi scheme in which over 7,000 investors suffered losses, according to authorities. Shapiro is scheduled for sentencing on Oct. 15 in South Florida; Woodbridge had offices in Boca Raton in addition to Sherman Oaks and other places. He faces a maximum of 25 years in prison. He was prosecuted by the U.S. Attorney’s office in Southern Florida. Prosecutors said Shapiro used Woodbridge to solicit investments primarily from seniors on the basis that their money would be used to invest in high-interest real estate loans. Instead, money from new investors was used to pay interest and dividends to established investors, as well as to bankroll lavish lifestyles for Shapiro and others. Losses to investors are estimated at more than $100 million. In November, Shapiro agreed to repay $120 million to resolve civil claims by the Securities and Exchange Commission. By funneling money through his network of more than 270 LLCs, prosecutors said Shapiro stole up to $95 million for personal use, including the purchase of a $6.7 million home, a wine collection, luxury jewelry, antique vehicles and chartering plane flights. He also allegedly failed to pay $6 million in taxes due to the IRS between the years 2000 and 2005. As part of his plea, prosecutors said Shapiro and his wife agreed to forfeit certain assets, many of which were seized during a search executed by federal agents at his home in Sherman Oaks. They included artworks by Pablo Picasso, Marc Chagall and Pierre-August Renoir as well as extravagant jewelry. The scam ran from July 2012 to December 2017, when Woodbridge filed for Chapter 11 protection from creditors. Management subsequently appointed a new board of directors and tried to hire a new chief executive to recover the money for investors and keep the company alive, but to no avail. Co-defendants Dane Roseman and Ivan Acevedo were also charged and are scheduled for trial in February.

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