California man pleads guilty in Florida to $1.3B fraud scam
Miami – A California man pleaded guilty in Florida to orchestrating a $1.3 billion real estate fraud scheme that stole money from thousands of investors nationwide and agreed to forfeit valuable jewelry, wine and paintings by artists such as Picasso and Renoir.
Court records show 61-year-old Robert Shapiro, of Sherman Oaks, California, pleaded guilty Wednesday in Miami federal court to mail and wire fraud and tax evasion. He faces up to 25 years in prison at sentencing in October before U.S. District Judge Cecilia M. Altonaga.
At least 9,000 people, many of them elderly who invested their retirement savings, suffered losses in the scheme, Miami federal prosecutors say.
Prosecutors say Shapiro’s Woodbridge Group had offices employing 130 people in California, Florida, Tennessee, Colorado and Connecticut. The pitch to investors was that Woodbridge held real estate loans that would pay them rates of interest between 5% and 10%.
In fact, the real estate was also owned by Shapiro through 270 shell companies and did not generate the necessary money for investors. Sometimes, the properties didn’t even exist.
It became a Ponzi scheme that paid older investors with money from newer ones, court records show. Five states entered cease-and-desist orders because Woodbridge was selling unregistered securities.
Authorities say the scam operated from at least July 2012 to December 2017. In 2017, the company filed for bankruptcy and defaulted on its obligations to investors.
As part of the plea agreement, Shapiro and his wife, Jeri, agreed to forfeit assets including paintings by Picasso (Face With Circles, Picador and Fish Subject), Renoir (Portrait de Rosita Mauri), Chagall (Le Clown Flutiste Au Coq) and others. They also will hand over to the government numerous pieces of jewelry, including a pair of 14-karat, white gold earrings with two black diamonds, two grey diamonds, two rose-cut diamonds and 266 round diamonds as well as a platinum ring with an emerald and a variety of diamonds.
Also on the forfeit list: 603 bottles of wine, a 1969 Mercury convertible and money in various bank accounts.
Court records show Shapiro spent millions of investor money on personal expenditures, such as $3.1 million for chartering private planes and travel, $6.7 million on his home, $2.6 million on home improvements, $1.8 million on personal income taxes, and over $672,000 on luxury automobiles. Shapiro also used bank accounts and credit cards opened in the name of his wife for family members.
The tax evasion charge involves more than $6 million never reported to the Internal Revenue Service from 2000 to 2005.
Also charged in the case are Dane Roseman and Ivan Acevedo, who are set for a February 2020 trial. They have pleaded not guilty. The U.S. Securities and Exchange Commission has also filed a civil enforcement case against Shapiro and the other defendants.