SEC, an acronym for Securities and Exchange Commission stated on Monday that Woodbridge Group of Companies and its previous owner were ordered by a federal judge to pay $1 billion in disgorgement and penalties for running a Ponzi scheme that targeted retail financiers.
Judge Marcia G. Cooke of the U.S. Federal Court for the Southern District of Florida sentenced Woodbridge and its 281 associated companies to pay $892 million as repayment to the individuals affected by this scam. Robert Shapiro, the previous owner of Woodbridge was ordered to pay $2.1 million in prejudgment interest, to renounce $18.5 million earned by ill-gotten ways along with a $100 million civil fine.
In December 2017, the SEC lodged an emergency activity that billed Woodbridge and its associates with running a plan that swindled 8,400 retail financiers all over the country, many of them seniors.
Mr. Shapiro assured financiers returns of as high as 10% from Investments luxury real estate, but instead their money flowed into a web of allied businesses that Mr. Shapiro controlled, the SEC said. He then used money from new financiers to reimburse earlier ones and disbursed a minimum of $21 million on buying luxury items, paying fees of the country club and purchasing charter planes, as per the agency’s report.
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“Our complaint charged that when Woodbridge’s fictitious business model failed, the company stopped paying shareholders and filed for Chapter 11 bankruptcy protection,” “The settlement provides for the return of significant funds to investors.”