SEC Finds Yet Another Ponzi-Artist, Capitol Investments' Nevin Shapiro
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The Securities and Exchange Commission said Wednesday that it has charged a Miami-based businessman with allegedly running a Ponzi scheme that took in more than $1 billion.
The agency is claiming that the founder and president of Capitol Investments USA, Nevin Shapiro, fraudulently offered risk-free annual returns of 26% to investors in his grocery diverting operation. The fund was designed to buy low-cost groceries in one area and sell them for higher prices in another region.
The director of the SEC’s Miami office said that Shaprio "used his prominence and prestige to gain investors’ trust in Capitol’s grocery-diverting business, but behind their backs he diverted their money to enrich himself."
A statement from the SEC said that Shapiro owns a $5 million home on Miami Beach, a $1 million boat, as well as numerous luxury vehicles and other high priced possessions.
Capitol was operating at a loss in 2004 and had almost no legitimate investment activity by 2005, according to the SEC. At this point, Shapiro began using funds from new investors to pay principal and interest to previous investors.
The SEC is alleging that Shapiro misappropriated a minimum of $38 million in funds from investors to enrich himself and to finance outside businesses not related to the grocery business.
Shapiro allegedly showed investors fabricated invoices and purchase order for nonexistent sales, according to the complaint from the SEC.
The agency is claiming that the founder and president of Capitol Investments USA, Nevin Shapiro, fraudulently offered risk-free annual returns of 26% to investors in his grocery diverting operation. The fund was designed to buy low-cost groceries in one area and sell them for higher prices in another region.
The director of the SEC’s Miami office said that Shaprio "used his prominence and prestige to gain investors’ trust in Capitol’s grocery-diverting business, but behind their backs he diverted their money to enrich himself."
A statement from the SEC said that Shapiro owns a $5 million home on Miami Beach, a $1 million boat, as well as numerous luxury vehicles and other high priced possessions.
Capitol was operating at a loss in 2004 and had almost no legitimate investment activity by 2005, according to the SEC. At this point, Shapiro began using funds from new investors to pay principal and interest to previous investors.
The SEC is alleging that Shapiro misappropriated a minimum of $38 million in funds from investors to enrich himself and to finance outside businesses not related to the grocery business.
Shapiro allegedly showed investors fabricated invoices and purchase order for nonexistent sales, according to the complaint from the SEC.
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