IBJNews

Williams Realty founder pleads the Fifth in Ponzi case

Back to TopCommentsE-mailPrintBookmark and Share

A former Indianapolis developer accused of luring more than a dozen Hoosiers into a $900 million Ponzi scheme invoked the Fifth Amendment more than 850 times when questioned under oath in Florida.

Sydney “Jack” Williams, who founded locally based Williams Realty Group, cited his Fifth Amendment right not to incriminate himself in response to most questions during a five-hour deposition in July. The 225-page transcript became public last month.

A bankruptcy-court-appointed trustee is going after Williams to recover more than $100 million the trustee describes as Williams’ ill-gotten profits from a Ponzi scheme conducted by Nevin K. Shapiro of Miami.

The trustee says Williams earned huge commissions by persuading dozens of investors, many with Indiana ties, to lend millions of dollars at high interest rates to Shapiro’s Capitol Investments USA Inc. in Miami Beach, Fla.

The firm billed itself as a grocery middleman but actually had no operations in recent years, federal prosecutors allege. In bankruptcy records, it lists just $500 in assets against $132 million in liabilities.

Court records say Williams isn’t a target of a criminal investigation. But Williams’ move to invoke the Fifth Amendment suggests his attorneys fear he might become one. Shapiro, the only person charged so far, is being held in a New Jersey prison.

The court-appointed trustee, Miami attorney Joel Tabas, filed his asset-recovery lawsuit against Williams in July. Any money it yields would go toward repaying other Capitol investors. The trustee already has secured the return of $130,000 in contributions Shapiro made to the University of Miami.

Williams wanted to testify but opted against it given the “unfounded, yet serious” allegations, said Martin Raskin, a Miami attorney who represents Williams.

“It is our hope and expectation that Jack will be able to fully testify about this matter in the not too distant future,” Raskin wrote in an e-mail. “Please do not assume that Jack’s invocation of his Fifth Amendment privilege is any sort of admission of culpability on his part. It is not.”

More questions

Attorney Gary M. Freedman, who conducted the deposition on the trustee’s behalf, said Williams has agreed to sit down for more questions. But he expects more of the same. The parties earlier had scheduled settlement talks but have made no progress.

Williams, 62, acknowledged during the July 22 deposition that he graduated from Ball State University in 1972, was a Sigma Chi fraternity member, and that his pledge trainer was David Letterman (not an investor in the scheme). He acknowledged he’s being sued in Florida courts by three investors in Capitol.

He didn’t say much else. Williams invoked the Fifth Amendment even on questions with answers that are publicly available, such as the name of the company he founded in Indianapolis in 1980, Williams Realty Group. He sold his interest in the company and moved to Naples several years ago, though it wasn’t clear from court files when he moved.

Williams also took the Fifth when asked whether he is currently employed, whether he is a principal in Naples, Fla.-based National Equity Trust (he’s listed as one on the company’s website), whether his bio on the website is accurate, and whether a photo next to his bio on the company’s website actually depicts him.

“I just can’t believe I’m even sitting here, quite frankly,” Williams said early in the interview. And later, he added: “I’ve got nothing to hide.”

The questions from Freedman, a partner with Miami-based Tabas Freedman Soloff Miller & Brown PA, provided some insight into the trustee’s investigation.

Freedman pushed Williams on where he got the money to pay off a $1.25 million second mortgage on his home in Naples in April, why he threw away a computer he had used for years in January, and why he was listed as the beneficiary of a life insurance policy taken out on Shapiro, the alleged Ponzi architect. Williams took the Fifth on each question.

Freedman also asked Williams about his social relationship with Shapiro, including trips to sit in the front row at football and basketball games, and whether he ever questioned the legitimacy of Shapiro’s business.

Another issue: Williams’ use of e-mails to communicate with Shapiro and others at Capitol. His attorney initially had claimed Williams did not communicate via e-mail, but Williams said during the deposition that the claim was a mistake.

He did not produce any e-mails for the trustee, saying AOL automatically deletes e-mails in his account after 120 days, and he does not save printouts.

“I’m not a big record guy, not a big detail guy,” he said, in a rare response in which he did not invoke the Fifth.

Locals invested

Some of the investors Williams recruited have continued to support him, convinced Williams also was a victim. His attorneys point to the roughly $10 million Williams allegedly lost in the scheme, loans the trustee is seeking to void as fraudulent.

Among the investors are Charles W. Brown, a principal in Indianapolis-based Southern Bells Inc., one of the nation’s largest Taco Bell franchisees, and prominent local attorney James R. Fisher, a former Ice Miller partner and principal in Indianapolis-based Miller & Fisher LLC. Another is Barry Alvarez, athletic director at the University of Wisconsin who for years was head football coach.

Tabas charges in his lawsuit that Williams “knew or should have known” Capitol was a fraud but was motivated to perpetuate it to enrich himself. According to court papers, Williams earned a 10-percent commission on hundreds of loans, many of which came from friends he met as a Ball State Sigma Chi.

“Williams, who had a seven-year relationship with the debtors, is believed by the trustee to have detailed knowledge of the business affairs of Capitol,” the trustee wrote in an Aug. 12 filing. “Williams was single-handedly involved in soliciting over 50 investors who ‘invested’ millions of dollars in Capitol’s Ponzi scheme.”

Capitol actually conducted no business operations from 2005 to 2009, federal authorities allege. Instead, the company paid previous investors—along with enormous commissions to Williams—with the new money coming in.

Fearing Shapiro was hiding assets, a major investor filed involuntary Chapter 7 bankruptcy for both Shapiro and Capitol Investments in November 2009.

The bankruptcy judge appointed a trustee in December 2009, and federal prosecutors filed securities fraud and money-laundering charges against Shapiro in April.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. These liberals are out of control. They want to drive our economy into the ground and double and triple our electric bills. Sierra Club, stay out of Indy!

  2. These activist liberal judges have gotten out of control. Thankfully we have a sensible supreme court that overturns their absurd rulings!

  3. Maybe they shouldn't be throwing money at the IRL or whatever they call it now. Probably should save that money for actual operations.

  4. For you central Indiana folks that don't know what a good pizza is, Aurelio's will take care of that. There are some good pizza places in central Indiana but nothing like this!!!

  5. I am troubled with this whole string of comments as I am not sure anyone pointed out that many of the "high paying" positions have been eliminated identified by asterisks as of fiscal year 2012. That indicates to me that the hospitals are making responsible yet difficult decisions and eliminating heavy paying positions. To make this more problematic, we have created a society of "entitlement" where individuals believe they should receive free services at no cost to them. I have yet to get a house repair done at no cost nor have I taken my car that is out of warranty for repair for free repair expecting the government to pay for it even though it is the second largest investment one makes in their life besides purchasing a home. Yet, we continue to hear verbal and aggressive abuse from the consumer who expects free services and have to reward them as a result of HCAHPS surveys which we have no influence over as it is 3rd party required by CMS. Peel the onion and get to the root of the problem...you will find that society has created the problem and our current political landscape and not the people who were fortunate to lead healthcare in the right direction before becoming distorted. As a side note, I had a friend sit in an ED in Canada for nearly two days prior to being evaluated and then finally...3 months later got a CT of the head. You pay for what you get...

ADVERTISEMENT