The head of a Sherman Oaks firm accused of bilking thousands of investors in a $1.3-billion Ponzi scheme was arrested Thursday along with two associates on federal criminal charges.
Robert Shapiro, 61, the owner of the Woodbridge Group of Cos., and two other company executives were accused of conspiracy to commit mail and wire fraud and other violations of federal law in an indictment unsealed in the Southern District of Florida.
Shapiro, of Sherman Oaks, Dane R. Roseman, 35, of Encino and Ivan Acevedo, 42, of Chatsworth were arrested in California and pleaded not guilty in federal court in Los Angeles. Roseman and Acevedo were released on bond, while Shapiro remained in custody. (Shapiro should not be confused with L.A. celebrity attorney Robert L. Shapiro.)
Ryan O’Quinn, Shapiro’s attorney, said his client “denies the allegations in the indictment and will vigorously defend himself in the appropriate forum.”
Attorneys for Roseman and Acevedo could not be immediately reached for comment.
Prosecutors said a Ponzi scheme was orchestrated from Woodbridge’s offices throughout the United States, including in Sherman Oaks, where it is headquartered, and in Boca Raton, Fla., where it was previously headquartered.
High-pressure sales tactics were used to secure money for what were promised to be “low risk” and “conservative” investments, but in reality the funds were funneled to real estate owned by Shapiro, according to the U.S. attorney’s office.
The indictment alleged that the wrongdoing caused most of the Woodbridge companies to file Chapter 11 bankruptcy, which prosecutors said caused investors to suffer substantial losses on their $1 billion in principal. At least 2,600 victims invested their retirement savings, totaling about $400 million, the U.S. attorney’s office said.
Shapiro siphoned off $35 million for his own benefit, according to prosecutors, spending $3.1 million for chartering private planes and travel, $6.7 million on a home, $2.6 million on home improvements, $1.8 million on personal income taxes, $1.4 million to his ex-wife, and more than $672,000 on luxury automobiles.
The Securities and Exchange Commission had filed an enforcement action in 2017 that it settled in January for a total of $1 billion in penalties and disgorgement of gains. The defendants — Woodbridge, 281 related companies and Shapiro — did not admit or deny the allegations.