Former Woodbridge CEO Shapiro pleads guilty, faces up to 25 years in prison
Robert Shapiro, a former Roaring Fork Valley resident and former CEO and president of the Woodbridge Group of Companies LLC, faces as many as 25 years in prison after pleading guilty last week to running a $1.3 billion Ponzi scheme that claimed more than 7,000 victims.
Shapiro, 61, of Sherman Oaks, California, entered his plea Wednesday in South Florida federal court. His sentencing hearing is scheduled Oct. 15 before U.S. District Judge Cecilia M. Altonaga.
Shapiro pleaded guilty to orchestrating and leading a massive investment fraud scheme; he also pleaded guilty to tax evasion for his failure to pay more than $6 million in taxes due and owing to the IRS for calendar years 2000 through 2005.
According to the indictment and court documents, Shapiro spearheaded and concealed the Ponzi scheme through his business, Woodbridge. Woodbridge employed approximately 130 people and had offices located throughout the United States, including in Carbondale; Boca Raton, Florida; Sherman Oaks, California; Tennessee; and Connecticut. The scheme ran from at least July 2012 to December 2017, when Woodbridge declared Chapter 11 bankruptcy and defaulted on its obligations to investors.
The pitch to investors was that Woodbridge held real estate loans that would pay them rates of interest between 5% and 10%.
In fact, the real estate also was owned by Shapiro through 270 shell companies and did not generate the necessary money for investors. Sometimes, the properties didn’t even exist.
It became a Ponzi scheme that paid older investors with money from newer ones, court records show. Five states entered cease-and-desist orders because Woodbridge was selling unregistered securities.
As part of the plea agreement, Shapiro and his wife, Jeri, agreed to forfeit assets including paintings by Picasso (“Face With Circles, Picador and Fish Subject”), Renoir (“Portrait de Rosita Mauri”), Chagall (“Le Clown Flutiste Au Coq”) and others. They also will hand over to the government numerous pieces of jewelry, including a pair of 14-karat, white gold earrings with two black diamonds, two gray diamonds, two rose-cut diamonds and 266 round diamonds as well as a platinum ring with an emerald and a variety of diamonds.
“Mr. Shapiro has taken personal responsibility for the failure of Woodbridge. His guilty plea follows his decision to voluntarily place hundreds of millions of dollars of assets under bankruptcy court supervision and the consensual resolution of the SEC enforcement investigation,” his lawyer, Ryan O’Quinn, said in a statement. “Mr. Shapiro hopes that these decisions allow the estate to focus on maximizing the value of the real estate portfolio for the benefit of Woodbridge’s creditors.”
Shapiro once lived at Aspen Glen in the lower Roaring Fork Valley. Woodbridge developed high-end properties the in upper and lower Roaring Fork Valley, as well as other parts of Colorado and California.
A number of Woodbridge homes in the Roaring Fork Valley have been or are being sold as part of Woodbridge’s Chapter 11 bankruptcy. Woodbridge closed its Aspen Glen office in Carbondale in November 2017.
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