Former Woodbridge Group of Companies Owner and CEO Robert H. Shapiro was sentenced to 25 years in prison by a federal court judge in Miami on Tuesday after pleading guilty in August to a $1.3 billion Ponzi scheme.
The 25-year sentence is the maximum possible under the charges of mail and wire fraud and tax evasion in the scheme, resulting in approximately $450 million in losses for more than 7,000 investors, many of them seniors who had invested retirement funds, between July 2012 and Dec. 2017.
Shapiro, not to be confused with L.A. celebrity attorney Robert L. Shapiro, promised investors returns as high as 10% from real estate loans to property developers, but in reality, the real estate was often owned by Shapiro or didn’t exist at all. As the real estate portfolio failed to generate enough cash to pay interest owed to investors and satisfy loan obligations, Shapiro and his co-conspirators used money from new investors to repay previous investors. Shapiro also spent $36 million on lavish items including luxury homes, paintings, wine and jewelry.
Prosecutors say Shapiro, 61, of Sherman Oaks, Calif., will forfeit an estimated $100 million in assets as part of a plea agreement, including the jewelry, wine and paintings by Picasso, Renoir and more. According to a report in the South Florida Sun Sentinel, one prosecutor estimated Tuesday that bilked investors will receive between 30 to 50 cents on the dollar for their losses.
U.S. District Judge Cecilia Altonaga, citing the testimony of several victims during the sentencing hearing Tuesday, rejected the defense attorney’s argument that Shapiro deserved about half the maximum sentence because he admitted his wrongdoing and helped authorities unravel the scheme.
Defense attorneys argued that Shapiro is in poor health and that the 25-year term recommended by prosecutors would be more harsh than the sentence he would receive for offenses such as armed bank robbery, hijacking an airplane, sexual abuse of a child or even murder.
The majority of the prison sentence—20 years—is for defrauding investors and committing wire and mail fraud. Shapiro was sentenced to an additional five years for failing to pay $6 million in taxes owed between 2000 and 2005.
According to the Sun Sentinel, a U.S. Bankruptcy Court in Wilmington, Del., continues to oversee the liquidation of nationwide real estate holdings once overseen by Shapiro.
Two alleged co-conspirators in the Woodbridge Ponzi scheme, both former directors of investment at Woodbridge—Dane Roseman and Ivan Acevedo, are scheduled for trial in February.