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Tag: U.S. District Judge Susan D. Wigenton

  • BULLETIN: 77-Year-Old Ponzi Enabler And His 40-Year-Old Son Who Helped Confuse Investors In Nevin Shapiro’s $930 Million ‘Grocery’ Ponzi Sentenced To Federal Prison; Roberto And Alejandro Torres Also Hit With $82 Million Restitution Order

    BULLETIN: Yesterday a federal judge in Michigan sentenced 75-year-old Ponzi schemer Edward May to 16 years in federal prison for pulling off a $350 million fraud.

    Today in New Jersey — in a separate case — a 77-year-old Ponzi enabler and his Ponzi-enabling, 40-year-old son were sentenced to combined prison terms of just shy of eight years for helping make Nevin Shapiro’s $930 million swindle possible.

    It could have been worse, but the pair later helped unmask the caper they once enabled.

    U.S. District Judge Susan D. Wigenton imposed a 48-month sentence on Roberto Torres, who will not leave prison until he is at least 81. Torres’ son, Alejandro Torres, was imposed a slightly lower sentence: 46 months. Both father and son also were hit with an $82 million restitution order. The elder Torres once resided in Lighthouse Point, Fla., but now lives in New York. His son lives in Boca Raton, Fla.

    When the Torreses will begin serving their terms was not immediately clear.

    Shapiro, 42, formerly of Miami Beach,  is serving a 20-year-term and is liable with Roberto and Alejandro Torres in the restitution order. Both father and son pleaded guilty to a single count of securities fraud. Shapiro pleaded guilty last year to one count of securities fraud and one count of money laundering.

    Roberto Torres was the chief financial officer of  Capitol Investments USA Inc., Shapiro’s phony “grocery” arbitrage business. Alejandro Torres was an accountant at the firm, which hatched a four-year-long scheme beginning in 2005 to siphon money from investors by cooking the books.

    Father and son “admitted to creating, or directing others to create, fraudulent documents which falsely touted the profitability of Capitol’s fictitious grocery diversion business,” the office of U.S. Attorney Paul J. Fishman of the District of New Jersey said today. “The Torreses admitted that those documents included: profit and loss figures fraudulently representing that Capitol’s wholesale grocery business was generating tens of millions of dollars in annual sales; personal and business tax returns for Shapiro and Capitol also fraudulently reflecting those sales; and numerous invoices fraudulently reflecting transactions between Capitol and other companies in the wholesale grocery business.”

    The Shapiro Ponzi, which was based in South Florida, toppled in January 2009, prosecutors said.

    Sydney Jack Williams, 63, of Naples, Fla., faces sentencing in January on charges he was Shapiro’s top recruiter and did not report $12 million in commissions.

  • BULLETIN: Nevin Shapiro, Operator Of $930 Million ‘Grocery’ Ponzi Scheme, Sentenced To 20 Years In Federal Prison; Fraudster ‘Used Other People’s Money To Live A Fantasy Life,’ U.S. Attorney Says

    BULLETIN: Nevin Shapiro, the Florida-based operator of a bizarre “grocery” Ponzi scheme that gathered nearly $1 billion and caused losses approaching $100 million, has been sentenced to 20 years in federal prison.

    Shapiro, 42, was charged by federal prosecutors in New Jersey last year after investigations by the FBI and the IRS. He pleaded guilty in September to one count of securities fraud and one count of money-laundering. All in all, the scheme brought in $930 million, prosecutors said.

    The SEC also sued Shapiro.

    “Nevin Shapiro used other people’s money to live a fantasy life built on false promises to unsuspecting victims,” said U.S. Attorney Paul J. Fishman.

    Elements of the case were brought by the interagency Financial Fraud Enforcement Task Force established by President Obama in November 2009.

    Shapiro operated a company known as Capitol Investments USA Inc., which purported to be in the wholesale grocery business.

    In reality, prosecutors said, Capitol “had virtually no income-generating business” between January 2005 and November 2009 — and Shapiro was running a colossal Ponzi scheme to fund his extravagant personal spending and penchant for gambling.

    At least $5 million evaporated when Shapiro stole from investors to pay illegal sports bets. He stole $26,000 a month to pay the mortgage on his Miami Beach home, which has been appraised at $5 million. Meanwhile, he stole $400,000 to pay for floor seats to watch the Miami Heat play basketball, while stealing $7,250 a month to make payments on his yacht and $4,700 a month to make payments on a leased Mercedes.

    Shapiro also lavished celebrities and sports figures, including college athletes, with gifts, prosecutors said.

    By the time the scheme collapsed and investor losses were totaled, Shapiro had stolen more than $82 million. He was ordered by U.S. District Judge Susan D. Wigenton to make restitution in the amount of $82.6 million.

    Prior to his arrest, he told investors one of the reasons they weren’t getting their payments was that his accountant was “on vacation,” prosecutors said.