Woodbridge Group executives Dane Roseman and Ivan Acevedo pleaded in federal court in Florida this week for their role in the $ 1.3 billion Ponzi program that affected 9,000 investors, the Justice Department said. The two are due to be tried in federal court in Miami on September 20.
Roseman and Acevedo were originally arrested and charged in 2019, along with Robert H. Shapiro, owner of the Woodbridge Group. According to the DOJ, Shapiro hatched and hushed up the Ponzi scheme through its business from July 2012 to December 2017 when it filed for Chapter 11 bankruptcy after the Securities and Exchange Commission froze its assets.
Shapiro later pleaded guilty to his own role in the fraud as well as separate charges of income tax fraud and was sentenced to 25 years in prison, according to the Justice Department.
Woodbridge Group had offices and customers across the country, but was based in Boca Raton, Florida and employed approximately 130 people. Between 2012 and 2017, Woodbridge pretended to solicit the money from investors and give them promissory notes on the loans they extended, which would pay high monthly interest rates. The company deceived investors by claiming their funds would be used to extend loans to third party property owners who would make the interest payments to the investors.
But Shapiro actually used the money to pay off previous investors, the SEC alleged in the original lawsuit against him. The Woodbridge owner also paid $ 64.5 million in sales agent commissions and used $ 21 million on his own expenses, including $ 3.1 million on chartered private planes and $ 1.2 million in alimony according to the SEC. To run the program, Shapiro acquired and owned the existing third-party real estate and established more than 270 LLCs, according to the DOJ.
Acevedo has worked for Woodbridge since 2009 and became the company’s sales director between 2013 and December 2014, while Roseman started as Woodbridge’s sales representative in August 2012 and became the company’s sales director between 2015 and 2017 Manipulation ”can be used to convince victims that their investments are low-risk and that real estate businesses have the funds to repay their returns.
“Woodbridge encouraged investment through phone and face-to-face calls, emails and website ads,” according to the DOJ. “The program also included false information to financial planners who helped Woodbridge sell investments to potential investors.”
In total, Shapiro made hundreds of millions of dollars in Ponzi-like payments; In some cases, Shapiro would even make interest payments if the property in question was not acquired in the first place. According to the DOJ, neither Roseman nor Acevedo had any knowledge of Woodbridge’s finances and was unaware that Shapiro was running a Ponzi program by using new investor funds to repay existing investors.
The overall program involved approximately 9,000 investors who raised Woodbridge more than $ 1.29 billion, with at least 2,600 of those investors bringing their retirement savings into the program. Roseman received about $ 2.5 million while Acevedo pocketed about $ 1.1 million.