The Securities and Exchange Commission announced Monday that a Florida court has ordered former Carbondale homeowner Robert Shapiro and the company he once ran, Woodbridge Group of Co., to pay a combined $1 billion in restitution to victims of a real estate Ponzi scheme that sent ripples through the Roaring Fork Valley.<\/p>\n
The ruling by Judge Marcia G. Cooke of the U.S. District Court for the Southern District of Florida approved judgments against Woodbridge and its 281 related companies to make $892 million in repayments for ill-gotten gains, a type of reimbursement that’s known in legal speak as “disgorgement.” The court also ordered Shapiro, the former CEO and owner of Woodbridge, to pay a $100 million civil penalty and to disgorge $18.5 million plus $2.1 million in prejudgment interest.<\/p>\n
“This resolution accomplishes one of the SEC’s core missions to protect retail investors,” Stephanie Avakian, co-director of the SEC’s Division of Enforcement, said in a statement. “Mr. Shapiro and other defendants will be held accountable and required to pay substantial penalties for their misconduct.”<\/p>\n
Shapiro previously agreed with the SEC<\/a> in October to pay more than $120 million in fines and penalties without confessing he was behind a Ponzi scheme that fleeced investors out of $1.2 billion.<\/p>\n “Mr. Shapiro settled the SEC action without admitting or denying the allegations in the complaint,” Shapiro’s attorney, Ryan O’Quinn of Miami O’Quinn said in a statement provided to The Aspen Times at the time. “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.”<\/p>\n The SEC’s statement said, “All defendants and relief defendants, without admitting or denying the SEC’s allegations, consented to the entry of final judgments which also permanently prohibit the defendants from violating the antifraud and other provisions of the federal securities laws.”<\/p>\n Several of Woodbridge’s victims recently reached out to the Times saying they were still waiting to be paid.<\/p>\n “We haven’t heard anything as of this date as to when to expect our money back,” wrote one individual purporting to be a victim Jan. 11. “We had previously been told to expect some payments to start in (December) 2018.”<\/p>\n Eric I. Bustillo, director of the SEC’s regional office in Miami, said the settlement and judgment will result in payments to the victims.<\/p>\n “Our complaint charged that when Woodbridge’s fictitious business model collapsed, the company stopped paying investors and filed for Chapter 11 bankruptcy protection,” he said in a statement in reference to Woodbridge’s Chapter 11 bankruptcy declaration in December 2017, after the SEC filed its complaint the same month against Shapiro. “The settlement provides for the return of significant funds to investors.”<\/p>\n Among the Woodbridge entities on the hook for disgorgement payments include Carbondale Basalt Owners LLC \u2014 which was ordered to pay $781,287 plus $91,143 in interest to the SEC. As payment, Carbondale Basalt Owners, according to court documents, conveyed two parcels at the Aspen Glen subdivision outside of Carbondale to the SEC.<\/p>\n The judgments come after the SEC, in December 2017, filed a complaint accusing Shapiro of assuring high returns to more than 8,400 investors by paying off earlier investors, while he was actually behind a complex Ponzi scheme that afforded him a luxury lifestyle.<\/p>\n In its statement, the SEC said Shapiro and Woodbridge “defrauded 8,400 retail investors nationwide, many of them seniors who had invested retirement funds. The SEC’s complaint alleged that Shapiro made Ponzi payments to investors and used a web of shell companies to conceal the scheme.”<\/p>\n Shapiro once lived at Aspen Glen; Woodbridge developed high-end properties in the upper and lower Roaring Fork Valley, as well as other parts of Colorado and California.<\/p>\n A number of Woodbridge homes in the Roaring Fork Valley have been or are being sold as part of Woodbridge’s Chapter bankruptcy 11 in Delaware. Woodbridge, which is based in Sherman Oaks, California, also closed its Aspen Glen office in November 2017.<\/p>\nRecommended Stories For You<\/h2>\n<\/p><\/div>\n