Ex-Woodbridge Group of Companies CEO and owner Robert Shapiro and former Woodbridge directors Ivan Acevedo and Dane R. Roseman are now facing criminal charges over their alleged involvement in operating a $1.2B Ponzi scam that went on from ’12 to ’17. All three men were arrested and appeared in federal court last week.
Woodbridge and its 281 related companies are accused of defrauding over 8,400 retail investors, including many senior investors who lost retirement money as a result. According to the US Securities and Exchange Commission’s (SEC) 2017 complaint against Shapiro, Woodbridge, and the related companies, investors were promised yearly returns of up to 5 to 8%. Payments were supposedly from the interest paid to an affiliate on loans issued to third party borrowers. However, contends the SEC, there were not enough third-party borrowers to pay the thousands of investors involved, resulting in just under $14M in interest income. Newer investors’ funds were allegedly used to pay earlier investors.
Woodbridge and the companies settled the regulator’s case last year by agreeing to pay over $1B, including disgorging $892M in ill-gotten gains. Shapiro’s settlement involved a $100M penalty and disgorgement of $18.5M plus $2.1M in prejudgment interest. Now, with the criminal case, Shapiro is charged with tax evasion and conspiracy to commit money laundering.
According to Justice.gov, Acevedo and Roseman are facing charges of conspiracy to commit wire fraud, conspiracy to commit mail fraud, and mail fraud. The two former directors were in charge of overseeing the sales department and the agents who solicited investors. Collectively the two men made about $3.1M in compensation from the sale of Woodbridge investments.
Roseman and Acevedo are also now facing parallel civil charges brought by the SEC. The regulator in its complaint contends that they should have known there were insufficient revenue and no interest payments being made but they allowed investors to continue thinking their money was safe.
In December 2017, Woodbridge ran out of funds and was no longer able to pay monthly dividends owed to investors. It filed for bankruptcy protection a few days later.
SEC and FINRA Go After Brokerage Firms and Brokers That Sold Woodbridge Investments
Woodbridge, its affiliated companies, and former executives are not the only ones that have come under fire for selling Woodbridge investments. The SEC has filed charges against a number of unregistered brokers and companies for illegally selling Woodbridge securities to investors.
Also, the Financial Industry Regulatory Authority (Finra) has barred brokers such as MML Investors representative Floyd Powell and Quest Capital Strategies broker Frank Dietrich for selling millions of dollars in Woodbridge promissory notes to investors. Finra awarded one investor $276K against Quest Capital Strategies for failing to properly supervise Dietrich.
Investor Fraud Lawyers | SSEK Law Firm
Our Woodbridge investor fraud lawyers have been meeting with investors who lost money in the Woodbridge Ponzi scam. Please contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) so that we can help you explore your legal options. We represent senior investors, other retail investors, high net worth individual investors, and institutional clients throughout the US.