Ex-Woodbridge Group CEO Robert Shapiro pleads guilty in $1.3 billion Ponzi scheme

Ex-Woodbridge Group CEO Robert Shapiro pleads guilty in $1.3 billion Ponzi scheme
Faces 25 years in prison for running fraud that affected more than 7,000 investors.
AUG 08, 2019

Robert Shapiro, the former CEO of Woodbridge Group of Companies, pleaded guilty to running a $1.3 billion fraud that caused more than 7,000 investors to lose money, according to prosecutors. Mr. Shapiro, 61, of Sherman Oaks, California, 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 stole as much as $95 million, routing money through a network of 270 limited liability companies he controlled, Miami U.S. Attorney Ariana Fajardo Orshan said in a statement Thursday. Recommended video: How Joe McLean became adviser to the NBA elite​ Losses to investors are expected to exceed $100 million, both sides agreed in a court filing. 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 Wednesday in Miami. He faces as long as 25 years in prison when he's sentenced Oct. 15. In November, he agreed to pay $120 million to resolve related civil claims by the U.S. Securities and Exchange Commission. Two alleged co-conspirators are scheduled for trial in February. Prosecutors said Mr. Shapiro used investor money for his $6.7 million home and $3.1 million for chartering planes and for 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. "Mr. Shapiro has taken personal responsibility for the failure of Woodbridge," his lawyer, Ryan O'Quinn, said in a statement. "His guilty plea follows his decision to voluntarily place hundreds of millions of dollars of assets under bankruptcy court supervision and the consensual resolution of the SEC enforcement investigation. Mr. Shapiro hopes that these decisions allow the estate to focus on maximizing the value of the real estate portfolio for the benefit of Woodbridge's creditors."

Latest News

Kestra adds Raymond James recruiter to expand advisor hiring push
Kestra adds Raymond James recruiter to expand advisor hiring push

The independent broker-dealer expands its business development bench with a new recruiter and an internal promotion in the West.

Cerity Partners names Will Peng chief innovation officer
Cerity Partners names Will Peng chief innovation officer

The leading ultra-high-net-worth RIA joins other large wealth firms, including Raymond James and LPL, in creating executive roles focused on artificial intelligence strategy

BlackRock expands Aladdin's private markets benchmarking tools
BlackRock expands Aladdin's private markets benchmarking tools

New Preqin-powered benchmarks add transparency to private equity and credit performance across BlackRock's platforms.

Fed's Bowman pushes for lighter-touch AI oversight at smaller firms
Fed's Bowman pushes for lighter-touch AI oversight at smaller firms

Supervision vice chair speaks following recent launch of AI adoption practices by regulators.

Why fixed income still belongs in your clients' portfolios
Why fixed income still belongs in your clients' portfolios

In an era of AI euphoria and market FOMO, getting back to basics with fixed income may be the most contrarian and most important move advisors can make.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.