Robert Shapiro, the former chief executive officer of Woodbridge Group of Companies, agreed to pay $120 million to the U.S. Securities and Exchange Commission to settle allegations he defrauded investors in a $1.2 billion real estate Ponzi scheme that drove his company into bankruptcy, according to court papers. Shapiro didn’t admit or deny the allegations.
Shapiro promised returns of as high as 10 percent from investments in developers who flipped luxury real estate but instead their cash flowed into a web of related companies that Shapiro controlled, the SEC said.
He then used money from new investors to repay earlier ones and spent at least $21 million to charter planes, pay country club fees and buy luxury items, according to the agency’s filing.
Shapiro, his wife Jeri, and the various Shapiro-owned entities named as defendants in the SEC suit are together responsible for paying $892 million to the commission, according to the documents filed Oct. 25 in federal court in Miami. The fines will go into a ”fair fund” which will be used to compensate the victims of the Ponzi scheme, the documents said.