Former Execs Plead Guilty In $1.3B Real Estate Fraud
Two Southern California-based businessmen pleaded guilty in South Florida federal court to participating in a $1.3B real estate investment fraud scheme that promised investors significant monthly returns.
Dane Roseman and Ivan Acevedo were previously executives at Woodbridge Group of Cos., which solicited money from investors, fraudulently claiming that its investments were tied to real property that would generate payments to Woodbridge and its investors. In reality, inasmuch as the properties existed, Woodbridge couldn't pay the returns it claimed to all of its investors.
The scheme cheated about 7,000 people, including many Florida-based retirees, out of varying amounts of money. Some investors lost large parts of their retirement savings.
The swindle was orchestrated by Robert Shapiro, the former president and CEO of Woodbridge, who was previously convicted of fraud and sentenced to 25 years in prison for his leadership role, the maximum for this particular crime. During the height of the scheme in the mid-2010s, Woodridge had offices in California, Florida, Colorado, Tennessee and Connecticut, and Shapiro controlled a network of more than 270 limited liability companies, which he used to acquire and sell the properties that were used to defraud investors.
Acevedo started working for Woodbridge as a sales agent around 2009, and between 2013 and 2014, he was its sales manager. Roseman started working for Woodbridge as a sales agent around 2012, and between 2015 and 2017 was the company's sales manager. The two oversaw a staff that employed high-pressure sales tactics that marketed Woodbridge's investments as low-risk and conservative.
In true Ponzi fashion, much of the investors' money went to pay earlier investors to keep the scheme running, but Shapiro also misappropriated between $25M and $95M in investor money for himself and his immediate family. Roseman received about $2.5M and Acevedo about $1.1M. Neither Roseman nor Acevedo was aware that Shapiro was using new investor money to pay earlier investors, according to the U.S. Attorney's Office of the Southern District of Florida.
The Securities and Exchange Commission has filed parallel civil enforcement actions against Woodbridge, Shapiro, his wife, and Acevedo and Roseman.
The two are scheduled to be sentenced separately in September by U.S. District Judge Cecilia Altonaga in Miami.