A Florida company has to pay $ 1 billion in the Ponzi scheme
A Florida federal court on Monday ordered an alleged Ponzi scheme operator to pay $ 1 billion to deceive 8,400 investors, many of them senior citizens.
In December 2017, SEC charged a group of unregistered investment funds, called the Woodbridge Group of Companies, and owner Robert Shapiro, who runs a pound of $ 1.2 billion.
See more: 5 years ago Bernie Madoff was sentenced to 150 years in prison – How his scheme works
SEC said the company, formerly headquartered in Boca Raton, Florida, had promised to pay These investors interest in 5-10% annually.
Woodbridge had said that the primary business was issuing loans to third party commercial owners who paid 1[ads1]1-15% annual interest rates. But the SEC's complaint said the "vast majority" of borrowers were companies owned by Shapiro who had no income and never made such interest payments. A web of shell companies hides the scheme in "a business model built on lies," the SEC said.
The complaint also said that Shapiro drew $ 21 million to himself, and used it on chartered aircraft, land club fees, luxury cars, and jewelry.
The Ponzi scheme collapsed in 2017 after Woodbridge stopped paying investors and filed for Chapter 11 bankruptcy protection, the complaint said. The SEC says it has also frozen all associated assets.
"Our complaint claimed that when Woodbridge's fictitious business model collapsed, the company stopped paying investors and filed for bankruptcy protection in Chapter 11," said Eric Bustillo, director of the SEC's office in Miami, on Monday's statement. investors. "
Woodbridge and its 281-related companies agreed to repay $ 892 million, while Shapiro pays a $ 100 million penalty and reimburses $ 18.5 million, plus $ 2.1 million in interest. also blocked from working with investment advisors, among other groups, and selling penny stocks.
In December, the SEC also charged 10 of Woodbridge's highest-profit sales agents with illegal sales values, and aggregated its total count to 18 sales agents charged.
