Florida Man Guilty of Running a Ponzi Scheme

 

The dust recently settled on another Ponzi scheme. This time the damage was done in Florida, and involved a man who lied to investors about his so-called grocery business. Neil Shapiro was sentenced to twenty years in prison after pleading guilty to securities fraud and money laundering; he was also ordered to pay $82 million in restitution to defrauded investors but they are unlikely to ever see that money. Shapiro raised $930 million through his company, Capitol Investments USA Inc. Shapiro used approximately $770 million to pay back to investors but blew the rest.

Capitol Investments was supposedly in the grocery-diverter business. Shapiro told potential investors that the company bought food products cheaply in one region and sold them for a profit elsewhere in the country and that the company had tens of millions of dollars in annual sales. Many investors were drawn into this scheme by the promise of a 10-26% return on investment. Investors were not aware that everything was a lie. Capitol did not have a multi-million dollar business. In fact, Capitol had virtually no business. Shapiro was just using money from investors to pay off other investors and to fund his personal lifestyle. Shapiro used money to pay off millions in gambling debts, to pay off the mortgage on a $5 million home, and to finance extravagant purchases. He also paid some of the money to investors that referred him other potential investors. Shapiro’s company was ultimately pushed into involuntary bankruptcy by angry investors that were not repaid.

Unfortunately many investors will end up with substantial losses unless other culprits can be identified.

This scheme once again shows how careful investors need to be when considering any investment that sounds too good to be true. Investors need to do thorough research before putting hard earned money in any private investment. There are more people out there like Nevin Shapiro.

Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 45 occasions. Page Perry’s attorneys have extensive experience in representing investors in cases involving Ponzi schemes. For further information, please contact us.