Former Woodbridge CEO Robert Shapiro agrees to pay $120M in penalties, compensation
November 1, 2018
Former Woodbridge Group of Cos. president and CEO Robert Shapiro has reached a settlement deal with the Securities and Exchange Commission by agreeing to pay more than $120 million in fines and penalties without admitting or denying he orchestrated an alleged Ponzi scheme that cheated investors out of $1.2 billion, according to a filing made last week in federal court.
The pending judgment also precludes Shapiro from selling securities and stipulates he must pay $120.7 million to the SEC within 14 days of the final judgment's entry with the court.
Shapiro has agreed to pay a civil penalty of $100 million to the U.S. Treasury or a so-called Fair Fund designated to compensate the defrauded victims, according to a consent form that Shapiro signed. Shapiro also agreed to pay an $18.5 million "disgorgement" fee along with $2.17 million in interest, court documents show.
All told, the judgment amounts to $892 million due to the SEC from numerous Shapiro-controlled entities as well as Shapiro's wife, Jeri, who is on the hook for $1.6 million, according to court filings. Jeri Shapiro also has agreed to surrender three properties to the SEC, all of which are located at Aspen Glen.
Those details and other specifics are part of a filing SEC attorneys made Oct. 25 in the U.S. District Court in the Southern District of Florida. SEC attorneys also filed a motion for the entry of the final judgment, which awaits the court's approval.
The SEC complaint was filed in December against Shapiro, who once lived at Aspen Glen in the lower Roaring Fork Valley, and Woodbridge, which developed high-end properties in upper and lower Roaring Fork Valley, as well as other parts of Colorado and California.
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The SEC's complaint accused Shapiro of assuring high returns to more than 8,400 investors by paying off earlier investors, while he was actually behind a Ponzi scheme that afforded him a luxury lifestyle that included expensive vehicles and lavish trips.
Shapiro's defense attorney in the litigation, Ryan O'Quinn of Miami, said Shapiro was pleased with the outcome.
"Mr. Shapiro settled the SEC action without admitting or denying the allegations in the complaint," O'Quinn said in a statement provided to The Aspen Times on Friday. "He is happy to have put this behind him to allow all remaining resources to be focused on obtaining maximum recovery for the benefit of the Woodbridge estate."
The litigation forced Shapiro to resign and Woodbridge, which is based in Sherman Oaks, California, to declare Chapter 11 bankruptcy, in December.
The Chapter 11 case also is winding down, with the Delaware bankruptcy court on Monday approving Woodbridge and its affiliated debtors' plan to liquefy their assets to pay back its creditors.
Since Sept. 1, the bankruptcy court has given Woodbridge permission to sell three single-family homes in Snowmass Village on Two Creeks Road, Branding Lane and Spur Ridge Road, as well as a home on White Horse Springs outside of Aspen, and at least four properties in the Carbondale area.
Editor's note: This story's original version was altered to include a statement issued Nov. 2 by the attorney for Robert Shapiro.
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