MIAMI, FL — Robert Shapiro, the former CEO of Woodbridge Group of Companies, was sentenced to 25 years in a federal prison by a Miami judge Tuesday in connection with a massive $1.3 billion fraudulent investment scam that caused some 7,000 investors across the United States to lose their retirement money and other savings.
Prosecutors said more than 2,600 of the victims invested more than $400 million of their retirement savings with Shapiro. “Of that, Shapiro misappropriated approximately $25 million to $95 million in investor money for himself and for the benefit of his immediate family members,” prosecutors said.
Prosecutors said Shapiro spent $3.1 million on private planes and travel, $6.7 million on a home, $2.6 million on home improvements, $1.8 million on his personal income taxes and more than $672,000 on luxury cars.
The sentence was handed down by U.S. District Judge Cecilia M. Altonaga and announced by U.S. Attorney Ariana Fajardo Orshan in Miami; Special Agent in Charge George L. Piro of the FBI’s Miami Field Office; Special Agent in Charge Michael J. De Palma of the IRS, Criminal Investigation and the Florida Office of Financial Regulation.
Prosecutors said a restitution hearing has been scheduled for 9:30 a.m. Jan. 17.
Woodbridge employed approximately 130 people with offices throughout the United States, including Boca Raton, Florida; Sherman Oaks, California; Colorado; Tennessee; and Connecticut. The scheme ran from July 2012 to December 2017, when Woodbridge filed for Chapter 11 bankruptcy.
The 61-year-old Shapiro, a native of Sherman Oaks, pleaded guilty to orchestrating and leading the massive investment fraud scheme and failure to pay more than $6 million in taxes to the IRS between 2000 and 2005. He will have to serve three years on parole after being released from prison, according to federal prosecutors.
Shapiro and his wife agreed to forfeit some of their personal property, including artworks by Pablo Picasso, Alberto Giacometti, Marc Chagall and Pierre-August Renoir; a collection of 603 bottles of wine; a 1969 Mercury convertible; a pair of 14-karat, white-gold earrings with two black diamonds amounting to 61.81 carats; two gray diamonds of 23.92 carats; two rose-cut diamonds and 266 round diamonds; a platinum ring with an oval-cut ruby of 10.91 carats; two trapezoid diamonds and 70 round-cut diamonds; a platinum ring with certified Colombia emerald-cut emerald of 9.54 carats; trapezoid-cut diamonds and 166 round-cut diamonds.
Prosecutors said at least five states issued cease-and-desist orders against Woodbridge entities but Shapiro and his co-conspirators continued to sell Woodbridge investments to residents in those states anyway.
“The Woodbridge sales operation functioned as a ‘boiler room’ and featured high-pressure sales tactics, deception and manipulation,” prosecutors said. “Woodbridge promoted investments through telephone and in-person conversations, emails and website displays. The scheme also involved misrepresentations to financial planners who helped Woodbridge to sell investments to potential investors.”
Two other defendants, Dane Roseman and Ivan Acevedo, are scheduled to go on trial in June.
“Shapiro and his co-conspirators falsely claimed that Woodbridge was profitable and advertised high rates of return to investors,” prosecutors said. “However, Shapiro’s real estate portfolio failed to generate sufficient cash flow to satisfy the loan obligations and interest payments owed to investors.”
Prosecutors said hundreds of millions of dollars invested by new Woodbridge investors was used to pay earlier investors “to make up for the cash deficiency.”
The case was prosecuted by Assistant U.S. Attorneys Roger Cruz and Lisa H. Miller. Assistant U.S. Attorneys Nalina Sombuntham and Alison Lehr are handling the asset forfeiture component of the case.