Nevin Shapiro, the former owner of Capitol Investments USA Inc., was indicted for allegedly leading an $880 million Ponzi scheme keyed to a bogus wholesale grocery distribution business, the U.S. Justice Department said.
Nevin Shapiro, the former owner of Capitol Investments USA Inc., was indicted for allegedly leading an $880 million Ponzi scheme keyed to a bogus wholesale grocery distribution business, the U.S. Justice Department said.
Shapiro, 41, of Miami Beach, Florida, used Capitol Investments to solicit hundreds of millions of dollars from people who thought they were investing in the grocery company, U.S. Attorney Paul J. Fishman of New Jersey said in a statement. Capitol Investments, now in bankruptcy, was based in Miami Beach, according to the indictment.
“The indictment alleges that Capitol had no active wholesale grocery business during the relevant time period,” Fishman said, adding that Shapiro used funds from investors in New Jersey and elsewhere to make payment to other investors and finance his “lavish” lifestyle.
Shapiro, who was charged on April 21 and has been in federal custody since surrendering to federal agents in Newark the same day, faces charges of conspiracy to commit securities fraud, securities fraud and wire fraud. The scheme was allegedly perpetrated from January 2005 to November 2009.
Securities fraud and wire fraud carry maximum penalties of as long as 20 years in prison. Shapiro's attorney, Maria E. Perez of Miami, didn't immediately return a call seeking comment on the indictment.
Shapiro promised investors returns of 10 percent to 26 percent on what he claimed were the grocery business's annual sales of tens of millions of dollars, the FBI has said.
He allegedly skimmed $35 million of investors' money for his own use, including the purchase of a $5.3 million Miami Beach home, monthly payments on a $1.5 million Riviera yacht and a lease on a Mercedes-Benz automobile.
Shapiro and Capitol filed for bankruptcy in November, Fishman said, owing investors more than $100 million.
