SEC probes new $900m Ponzi scheme

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Alan Rappeport
Financial Times
April 21, 2010

US authorities on Wednesday charged a Miami businessman with running a $900m Ponzi scheme and illegally using investors’ money to fund his lavish lifestyle.

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The US Securities and Exchange Commission has accused Nevin Shapiro, founder of Capitol Investments USA, of defrauding investors by selling the securities that he told them would fund the company’s grocery distribution business, but instead spending their money on other ventures and on himself.

“Shapiro lured investors by falsely touting Capitol’s securities as a risk-free investment with extraordinarily high returns,” Eric Bustillo, head of the SEC’s Miami office, said. “He used his prominence and prestige to gain investors’ trust in funding Capitol’s grocery diverting business, but behind their backs he diverted their money to enrich himself.”

According to the SEC, Mr Shapiro promised 60 investors 26 per cent annual returns. His grocery business was supposed to be buying low-cost groceries in certain regions and reselling them at higher prices in other more expensive areas.


This article was posted: Wednesday, April 21, 2010 at 3:03 pm Videos:

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