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The U.S. Securities and Exchange Commission (SEC) announced charges and an asset freeze against a group of unregistered funds and their owner. They stand accused of allegedly bilking thousands of retail investors, many of them seniors, in a $1.2 billion Ponzi scheme.

Investigators filed this action after obtaining court orders in September and November in subpoena enforcement actions that forced the unregistered companies to open their books.

According to the SEC, Robert H. Shapiro and a group of unregistered investment companies called the Woodbridge Group of Companies, formerly headquartered in Boca Raton, Florida, defrauded more than 8,400 investors in unregistered Woodbridge funds.

In the complaint the SEC said that Woodbridge advertised its primary business as issuing loans to supposed third-party commercial property owners paying Woodbridge 11% to 15% annual interest for “hard money,” short-term financing. In return, Woodbridge allegedly promised to pay investors 5% to 10% interest annually.

Woodbridge and Shapiro allegedly sought to avoid investors cashing out at the end of their terms and boasted in marketing materials that “clients keep coming back to [Woodbridge] because time and experience have proven results. Over 90% national renewal rate!” While Woodbridge claimed it made high-interest loans to third parties, the SEC’s complaint alleges that the vast majority of the borrowers were Shapiro-owned companies that had no income and never made interest payments on the loans.

The SEC complaint alleges that Shapiro and Woodbridge used investors’ money to pay other investors, and paid $64.5 million in commissions to sales agents who pitched the investments as “low risk” and “conservative.”

Shapiro is alleged to have diverted at least $21 million for his own benefit, including to charter planes, pay country club fees and buy luxury vehicles and jewelry. According to the complaint, the scheme collapsed in typical Ponzi fashion in early December as Woodbridge stopped paying investors and filed for Chapter 11 bankruptcy protection.