Developer Robert Shapiro, the former CEO of Woodbridge Group, was given the maximum sentence of 25 years in prison Tuesday for running a $1.3 billion ponzi scheme that preyed on thousands of elderly victims in California and Florida, according to news reports.
Among those victimized by the scheme were ABC News anchor George Stephanopoulos.
The Securities and Exchange Commission (SEC) initially began looking into Woodbridge Group in 2016, investigating an alleged fraud. Woodbridge Group reportedly promised low-risk investments with high-risk returns, but instead, the money was shuffled into shell companies.
Woodbridge’s representatives promised investors they would give homebuyers property-secured loans while using the money to finance their own projects and paying the old investors out of money generated from new investors, according to prosecutors. In reality, the Woodbridge Group, which Shapiro founded in Boca Raton, Florida, would persuade them to finance luxury properties in California and Florida through unsecured loans.
The alleged scheme, which ultimately collapsed and forced the Woodbridge Group to file for bankruptcy in 2017, cost investors more than $1 billion.
While Stephanopoulos was one of the highest-profile investors to put money into Woodbridge, at least 2,600 others are elderly and had put retirement savings into properties in the hopes of seeing the kind of high returns promised by Shapiro and his associates.
Shapiro – not the same person as Robert L. Shapiro, the celebrity lawyer best known for successfully defending O.J. Simpson in the 1990s – is also accused of taking $35 million of the funds for his own use and spending $3.1 million on chartered planes and travel, $6.7 million on a luxury home, $1.4 million on payments to his ex-wife, and more than $672,000 on high-end cars.
The SEC settled its enforcement action by ordering Shapiro and the Woodbridge group to pay a total of $1 billion. Independent managers are currently selling off the remaining assets of the defunct firm to pay back defrauded investors.
