No, the history-making scandal surrounding Bernie Madoff did not put an end to massive Ponzi schemes. Can you believe it?
Woodbridge May Be a Billion-dollar Ponzi Scheme
Ponzi schemes - even billion dollars ones - continue to claim victims even in the aftermath of the largest ever private financial financial scandal. Just consider that the Securities and Exchange Commission (SEC) recently announced that it was investigating Robert Shapiro, former head of the Woodbridge Group of Companies, for allegedly running a $1 billion Ponzi scheme!
According to the Wall Street Journal, which lead reporting on the Woodbridge scandal and relayed the SEC's investigation, Shapiro resigned this month after being accused of duping investors into thinking that Woodbridge had been financing property acquisitions for third-party borrowers, when in fact those borrowers were shell companies owned and controlled by Shapiro. It also appears that the commissions totaling around $65 million which were paid to "unregistered agents" for the financing transactions may have gone back into Woodbridge. Talk about a sophisticated shell game!
Flipping $100 Million-dollar Homes May Be Part of the Ponzi
Over the past several years, Shapiro's Woodbridge increasingly became a force in residential real estate in Southern California, Colorado, and the Florida Coast. The company "flipped" houses worth millions. It was also reportedly the puppetmaster of LA residential real estate brokerage, Mercer Vine.
While Shapiro has denied all accusations of wrongdoing, well, we've heard this song before... And so have the investors in Woodbridge who are now worried they will lose everything - or have to claw it back through lawsuits that might take years to come to fruition. Worst of all, according to the SEC, many of the investors caught up in the alleged Ponzi Scheme were senior citizens who had believed the notes they had purchased through Woodbridge were secured. Sorry, folks...