The scheme caused more than 7,000 retirees and other investors to lose money
Woodbridge Group of Companies' former Chief Executive Robert Shapiro received the maximum sentence of 25 years in prison for running a $1.3 billion fraud that caused more than 7,000 retirees and other investors to lose money.
Mr. Shapiro, 61, of Sherman Oaks, Calif., promised returns as high as 10% from investments in loans to property developers. Instead, he used money from new investors to repay earlier ones and used $36 million to buy luxury homes, wines, paintings and custom-designed jewelry for his wife.
U.S. District Judge Cecilia Altonaga in Miami sentenced Mr. Shapiro Tuesday, giving him twice the amount of time suggested by his lawyers, according to court records.
Mr. Shapiro's team argued that he's in poor health and that the 25-year term recommended by prosecutors is harsher than the sentence he would likely have gotten for armed bank robbery, hijacking an airplane, sexual abuse of a child or even murder.
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Prosecutors claim Mr. Shapiro moved money through a network of 270 limited liability companies that he controlled. Investors lost $450 million, according to the government.
The scam ran from July 2012 until December 2017, when Woodbridge filed for Chapter 11 bankruptcy protection.
Mr. Shapiro pleaded guilty to conspiracy and tax evasion in August. In November 2018, he agreed to pay $120 million to resolve related civil claims by the Securities and Exchange Commission. Two alleged co-conspirators are scheduled for trial in June.
Prosecutors said Mr. Shapiro used investor money for his $6.7 million home and $3.1 million for chartering planes and personal travel.
He agreed to forfeit artworks by Pablo Picasso, Alberto Giacometti, Marc Chagall, and Pierre-August Renoir; 603 bottles of wine; numerous pieces of luxury jewelry; and a 1969 Mercury convertible.
The case is U.S. v. Shapiro, 19-cr-20178, U.S. District Court, Southern District of Florida (Miami).
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