SEC Accuses Prominent Miami Beach-based Businessman of $900M Ponzi Fraud

The Securities and Exchange Commission today charged a prominent Miami Beach-based businessman and philanthropist with fraud for allegedly running a $900 million Ponzi scheme.

The SEC alleges that Nevin Shapiro, the founder and president of Capitol Investments USA, sold investors securities that he claimed were risk-free with rates of return as high as 26% annually. The SEC said Shapiro in a classic Ponzi scheme manner, used funds from new investors to pay the principal and interest to earlier investors.

SEC: “Shapiro lured investors by falsely touting Capitol’s securities as a risk-free investment with extraordinarily high returns,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “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 complaint, Shapiro used at least $38 million of investor funds to finance other business activities and a lavish lifestyle, including a $5 million home in Miami Beach, a $1 million boat, luxury cars, expensive clothes, high-stakes gambling, and season tickets to premium sporting events. Shapiro additionally tapped approximately $13 million of investor funds to pay large undisclosed commissions to individuals who attracted other investors.

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