The Securities and Exchange Commission charged five salespeople for posing as financial advisers even though they were not registered with the Commission, selling $243 million-worth of Woodbridge Group of Companies and similar securities of ill repute to more than 1,600 investors through false promises, including grandiose claims of "guaranteed or stable returns." An earlier report compiled prior to the present SEC complaint estimated that another 8,400 senior citizens and elderly investors may have been victimized in the massive fraud.
In January 2018, the SEC first charged Woodbridge Group of Companies owner Robert H Shapiro of Sherman Oaks, California and Aspen, Colorado with securities fraud, claiming that Shapiro participated in a $1.2 billion Ponzi scheme using unregistered Woodbridge funds, and, occasionally, a purported real estate company known as Shapiro Property LLC.
The January complaint identified 12-to-18 month promissory notes and various private placement offerings related to Woodbridge as the primary vehicles Shapiro and others in the purported fraud network used in order to solicit investors to participate in the Ponzi scheme. Other affiliated products and entities included in SEC's complaint were RS Protection Trust, WMF Management, Woodbridge Structured Funding, Woodbridge Mortgage Investment Fund (1, 2, 3, 3A, and 4), and Woodbridge Commercial Bridge Loan Fund (1 and 2),
For example, FINRA cited former Royal Alliance Associates broker Frank John Capuano for his role in selling $1.1 million of unregistered Woodbridge notes to nine RAA customers, receiving $34,000 in commissions as a result.
In June 2018, InvestmentNews reported the Woodbridge Ponzi was "more widespread than thought," estimating that more than 8,400 senior citizens across the United States may have been victimized. FINRA began issuing suspensions and fines to brokers who sold Woodbridge products or were otherwise tied to the fraud, such as Christopher Wendel (SA Stone Wealth Management), Peter Holler (Securities Service Network), and Ray Kay aka Raymond Kotrozo (Beverly Hills), whom FINRA additionally sanctioned for attempting to sell Woodbridge products after having previously been barred from the industry.
In a similar vein, the August 22, 2018 SEC release charged Barry Kornfield with illicitly selling Woodbridge products despite having previously been barred from the industry. In addition to Barry Kornfield, the SEC's complaints named Ferne Kornfeld (Barry's wife), Lynette M. Robbins, Andrew G. Costa, Albert D. Klager, and Robbins' Knowles Systems Inc., with illegally selling Woodbridge products without proper registration and in contravention of the regulator's prohibitions.
Investigators wrote that the Kornfields, Costa, and Klager specifically earned nearly $6 million in commissions for selling approximately $100 million-worth of the Woodbridge securities from 2013 through 2017, often telling their clients that the product was "safe and secure."
The complaint alleges that the aforementioned defendants sold more than $243 million of unregistered securities to more than 1,600 investors, many of whom were senior citizens.
If you have invested with a broker, financial adviser, or unregistered salesperson in the Ponzi-implicated Woodbridge Group of Companies and have suffered losses as a result of the unsubstantiated representations or promises of "guaranteed returns" for a "safe and secure" product that failed to materialize, at your expense, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.