A Florida federal judge on Monday Jan 28 ordered Woodbridge Group of Companies LLC and its former owner to pay more than $1 billion to resolve the U.S. Securities and Exchange Commission’s claims that Woodbridge operated as a Ponzi scheme involving a complex web of allegedly phony real estate and note investments and unregistered Florida-based funds.
Judge Marcia G. Cooke of the U.S. District Court for the Southern District of Florida ruled in favor of the Securities and Exchange Commission in ordering the judgement against Woodbridge and its 281 related companies. The company will have to pay $892 million in disgorgement, with the court ordering former owner and CEO Robert H. Shapiro to pay a $100 million civil penalty.
Additionally, Shapiro will have to pay back $18.5 million in “ill-gotten gains,” plus another $2.1 million in prejudgment interest.
Shapiro and a group of unregistered investment companies, collectively called the Woodbridge Group of Companies LLC, defrauded more than 8,400 investors through unregistered Woodbridge funds, the SEC first alleged in December 2017.
The fund advertised its primary business as issuing loans to supposed third-party commercial property owners who paid Woodbridge between 11% and 15% annual interest for “hard money,” short-term financing. In return, Woodbridge promised to pay investors 5% to 10% interest annually.
However, the SEC said that the fund used investor money to pay other investors as well as $64.5 million in commissions to sales agents. Shapiro himself was accused of diverting at least $21 million for his own benefit, including to charter planes, pay country club fees and buy luxury vehicles and jewelry.
WOODBRIDGE INVESTOR RESOURCES: http://www.woodbridgeinvestigation.com/
This is at least the FOURTH note investment fund in recent months that has been closed down by the SEC and in which investors have lost multi-millions.
And this is why THE PAPER SOURCE does not permit the solicitation of investors by funds at any of our events or in advertising. While some funds are no doubt legitimate, some are not, so we have chosen this policy.
Our annual Paper Source Note Symposium will be April 11-13 in Las Vegas: www.PaperSourceSeminars.com