Woodbridge under SEC fraud investigation over Aspen Glen

Staff report
Glenwood Springs Post Independent
Woodbridge Realty handles most of the for-sale listings for Aspen Glen properties, and owns several undeveloped lots in the gated community.
Chelsea Self / Post Independent

Woodbridge Group, a major player in Roaring Fork Valley real estate, is under investigation by the U.S. Securities and Exchange Commission to determine “whether the company is operating a fraud on its investors,” a court filing says.

“Woodbridge has raised more than $1 billion from several thousand investors nationwide through multiple investment offerings,” SEC attorneys said in the Oct. 31 filing in U.S. District Court in Miami.

Woodbridge and its representatives “may have been or may be, among other things, making false statements of material fact or failing to disclose material facts to investors and others, concerning, among other things, the use of investor funds, the safety of the investments, the profitability of the investments, the sales fees or other costs associated with the purchase of the investments,” the filing said.

The attorneys asked the court to order 235 limited liability corporations associated with Woodbridge to comply with subpoenas issued in August that sought detailed bank and ownership information. The LLCs ignored the subpoenas, the filing said.

Woodbridge, which operates around the country, began buying properties in the Roaring Fork Valley around 2014.

Its president, Robert Shapiro, is a partial-year resident of Aspen Glen who has thrown lavish New Year’s parties there. He has donated at least $325,000 to conservative causes in the past five years and has brought GOP luminaries to Aspen Glen. The political guests have included Rick Perry, before Perry was Donald Trump’s energy secretary; Karl Rove, George W. Bush’s campaign mastermind; and controversial Milwaukee County Sheriff David Clarke.

In the course of the SEC’s investigation, the Oct. 31 court filing says, Shapiro exercised his Fifth Amendment right not to offer evidence that might be used against him.

A public relations representative for Woodbridge offered this statement Tuesday to the Post Independent:

“Woodbridge Group of Companies has been cooperating with, and producing documents to, the Securities and Exchange Commission as it conducts an investigation into the company’s product offerings. Despite the fact that the SEC ‘has not concluded that any individual or entity has violated the federal securities laws,’ Woodbridge will continue to work with the agency to resolve the matter as quickly as possible. It is important to note that Woodbridge, in its years of dealing with a multitude of state and federal regulators, has never been found to have engaged in any fraud. The company stands behind its business model, and its investors, and lenders.”


Woodbridge Realty lists a company address of 9929 Highway 82 at Aspen Glen, the high-end residential development 3 miles north of Carbondale.

According to the Garfield County Assessor’s Office online database, some 57 LLCs are listed as owners of about 70 properties in the development under the Woodbridge Group of Companies corporate address in Sherman Oaks, California, another of Shapiro’s addresses.

The Oct. 31 legal filing describes potential concern about the company’s use of LLCs:

“Woodbridge has represented to investors that bona-fide third parties are borrowing money and repaying interest at a high rate, of which the investors in Woodbridge funds get a portion thereof. However, evidence obtained in our investigation reveals that many, if not all, of these LLCs may be Woodbridge affiliates with Shapiro as their manager.”

Timothy Dunn, who worked 21 years as an SEC accountant/examiner and now is a consultant in Denver offering services including fraud prevention, financial compliance and expert testimony, reviewed the Oct. 31 filing for the Post Independent. He said the question of Shapiro’s control of the LLCs raised questions about the use of investor funds and whether Woodbridge accurately described the situation to investors.

“It’s material information for an investor to have” if there aren’t, in fact, outside borrowers, or if Woodbridge was lending money to entities that it controlled.

He said he would want to see the loan documents in each instance.

expensive listings

Woodbridge-associated companies also own 55 properties in Carbondale’s River Valley Ranch, among many others in the valley.

Woodbridge Realty’s current for-sale listings include 29 properties at Aspen Glen, ranging in price from $800,000 to $7 million; 26 Glenwood Springs-area properties ranging from $1.1 million to $23 million for the Inyanga Ranch up Canyon Creek. It lists 18 properties in the Aspen vicinity ranging up to $40 million, and 23 in Snowmass Creek/Snowmass Village with a high listing of $58.5 million for a property on Watson Divide.

Besides its real estate arm, Woodbridge Group offers commercial real estate financing and investment services.

The SEC filing said, “The Commission is investigating the offer and sale of unregistered securities, the sale of securities by unregistered brokers, and the commission of fraud in connection with the offer, purchase and sale of securities.”

An SEC attorney heading the case said he was not authorized to talk to the media about it, so further explanation was not available.

Dunn said that under some circumstances, businesses don’t have to register securities, but that comes with certain stipulations. If an operation is not following all of these requirements, then it is in violation. The rules include providing specific information about the investment to anyone buying the securities.

Beyond concern about unregulated investment vehicles, the SEC might also believe the “use of investor funds possibly is not described as clearly as it should be,” Dunn said.


Dunn said the agency’s lawyers noting that Woodbridge continues to raise money from investors might mean that regulators “may seek a cease-and-desist order on (Woodbridge’s) ability to raise more money.”

Among the group’s investment offerings, the SEC lawyers said, is “the First Position Commercial Mortgage (‘FPCM’). Woodbridge currently describes it as a ‘private third-party loan to Woodbridge (which) provides higher returns with shorter terms secured by commercial real estate. Private lenders select a commercial mortgage in Woodbridge’s inventory to serve as collateral for their private loan. They are recorded on title and acquire a first lien position on the mortgage. And every lender is paid monthly interest from the moment they loan to Woodbridge at a fixed annual 5 percent interest with a return of principal at the end of the one-year term.’

“Each time a property is purchased by Woodbridge to add to its inventory, Woodbridge forms a different LLC, purportedly to segregate liability. These are the LLCs that the Commission’s investigative team subpoenaed for documents.”

Dunn, the former SEC examiner, said it was a red flag that the LLCs had not complied with the August subpoenas.

“If everything is legitimate,” he said, “then all this information should be available and this should be taken care of fairly quickly.”

He added, “Once the SEC, or any government office, has engaged with you, they don’t stop.”

Post Independent news staffers Randy Essex, John Stroud, Ryan Summerlin and Sallee Ann Ruibal compiled this report.