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Defendant pleads guilty in $880M fraud case

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A Florida man known for his sports-related philanthropy pleaded guilty Wednesday to running a multistate Ponzi scheme that prosecutors say left investors, including some in Indiana, with up to $100 million in losses.

Nevin Shapiro pleaded guilty in New Jersey federal court to one count of securities fraud and one count of money laundering as part of an agreement that still has him facing up to 17 years in prison at his Jan. 4 sentencing.

Prosecutors say 41-year-old Shapiro of Miami Beach used a Florida-based company called Capitol Investments USA Inc. to raise nearly $900 million from investors who thought they were buying into a wholesale grocery distribution business.

Sydney “Jack” Williams, who founded Indianapolis-based Williams Realty Group, has been accused of persuading more than a dozen Indiana investors from 2003 to 2009 to lend millions of dollars at high interest rates to Capitol Investments USA.

Charges filed by the Securities and Exchange Commission claim Shapiro promised investors risk-free annual returns as high as 26 percent by persuading them to invest in a "grocery diversion" enterprise—a practice of buying low-cost groceries in one region of the country and reselling them in higher-priced markets.

Shapiro allegedly siphoned at least $35 million of the proceeds for personal use, including $23 million for salaries and commissions for himself, $5 million for a Miami Beach mansion and $400,000 for courtside Miami Heat basketball tickets. He also spent lavishly on luxury cars, a high-stakes gambling habit, and a pair of diamond-studded handcuffs given to an unnamed prominent athlete, according to court documents.

Shapiro also was generous with what prosecutors say was his investors' money, donating to athletic groups and charities and getting a student athlete lounge named after him at the University of Miami by donating $150,000. Shapiro's name was removed from the lounge in 2008 after the school said he did not continue following his pledged donation-payment plan.

Shapiro left more than 50 investors in Florida, Indiana and New Jersey with total losses of between $50 million and $100 million, according to U.S. Attorney Paul J. Fishman.

"Nevin Shapiro made a name for himself as a big contributor to student athletics, showering his favorite players with gifts and cash, living the high life, and rubbing elbows with the pros," Fishman said. "Today, Shapiro admitted that he built the facade of his lifestyle with money he stole from those who trusted him."

Shapiro's lawyer, Maria Elena Perez, said her client was in bankruptcy but was working on giving his victims restitution.

"I think today was the first day toward closure," she said. "He's accepted responsibility and hopes to make the victims whole."

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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