The SEC and the U.S. Attorney's office in New Jersey on Wednesday charged a Miami Beach-based businessman with allegedly running a Ponzi scheme that sucked in close to $1 billion.
The Securities and Exchange Commission and U.S. District Attorney Paul Fishman filed fraud charges in New Jersey against Nevin K. Shapiro, founder and president of Capitol Investments USA.
Shapiro is accused of fraudulently offering risk-free annual returns as high as 26% to investors in his grocery diverting operation, a type of business where low-cost groceries are purchased in one region and sold for a higher price elsewhere.
"[Shapiro] 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," said Eric Bustillo, director of the SEC's Miami regional office.
Investigators from the U.S. Attorney's office said more than 60 investors, many of them in New Jersey, sent Shapiro more than $880 million, incurring losses of at least $80 million.
The SEC said that Shapiro's "lavish" lifestyle included a $5 million house in tony Miami Beach and a $1 million boat, as well as "luxury cars, expensive clothes, high-stakes gambling and season tickets to premium sporting events."