Woodbridge Group executives Dane Roseman and Ivan Acevedo pleaded guilty in a Florida federal court this week for their role in the $1.3 billion Ponzi scheme that affected 9,000 investors, according to the Department of Justice. The two are scheduled to be sentenced on Sept. 20 in federal court in Miami.
Roseman and Acevedo were originally arrested and charged in 2019, along with Robert H. Shapiro, the owner of the Woodbridge Group. According to the DOJ, Shapiro concocted and concealed the Ponzi scheme through his business from July 2012 through December 2017, when it filed for Chapter 11 bankruptcy after the Securities and Exchange Commission froze its assets.
Shapiro later pleaded guilty for his own role in the fraud, as well as separate charges of income tax fraud, and was sentenced to 25 years in prison, according to the Justice Department.
Woodbridge Group had offices and clients throughout the country, but was based out of Boca Raton, Fla., and employed about 130 people. Between 2012 and 2017, Woodbridge purported to solicit investors’ money and issued them promissory notes for the loans they made that would pay high monthly interest rates. The company misled investors by claiming their funds were being used to make loans to third-party property owners who would make the interest payments to the investors.
But Shapiro was actually using the money to pay previous investors, the SEC claimed in the original complaint against him. The Woodbridge owner also paid $64.5 million in commissions to sales agents while using $21 million for his own expenses, including $3.1 million in chartered private planes and $1.2 million in alimony, according to the SEC. To run the scheme, Shapiro acquired and owned those third-party properties that did exist, and created more than 270 LLCs to do so, according to the DOJ.
Acevedo had worked for Woodbridge since 2009, and became the company’s sales manager between 2013 and December 2014, while Roseman started working for Woodbridge as a sales agent in August 2012, and became the company’s sales manager between 2015 and 2017. The company’s sales operation worked as a “phone room,” using “high-pressure sales tactics, deception and manipulation” to convince victims their investments were low risk and the real estate deals would raise the funds to pay back their return.
“Woodbridge promoted investments through telephone and in-person conversations, e-mails and website displays,” according to the DOJ. “The scheme also involved misrepresentations to financial planners who helped Woodbridge to sell investments to potential investors.”
In all, Shapiro made hundreds of millions of dollars in Ponzi-like payments; in some cases, Shapiro would even make interest payments when the properties in question had never been acquired in the first place. According to the DOJ, neither Roseman nor Acevedo had knowledge about Woodbridge’s finances and did not know that Shapiro was running a Ponzi scheme by using new investor funds to repay existing investors.
The total scheme involved about 9,000 investors that gave Woodbridge more than $1.29 billion, with at least 2,600 of these investors giving their retirement savings to the scheme. Roseman got about $2.5 million, while Acevedo pocketed about $1.1 million.
