Nevin Shapiro

Shapiro was born in Brooklyn on April 13, 1969, to a Jewish family and moved with his family to Miami Beach, Florida at an early age. He graduated in 1986 from Miami Beach Senior High School. Shapiro was a member of the school's basketball and wrestling teams.^[1]

Shapiro started Capitol Investments USA, which he claimed bought wholesale groceries and shipped them to more expensive markets, although he said that he never actually sold the groceries. Shapiro's Ponzi scheme was based on attracting investors to Capitol Investments.^[3] He promised investors they would make 10 to 26 percent commissions every month.^[3]

In 2003, his business grew quickly through connections with Sherwin Jarol in Chicago, Craig Currie in New Jersey, and Sydney "Jack" Williams, who had real estate in Naples, Florida and Indianapolis.^[3]

According to FBI Special Agent Gregory Yankow in a Federal Criminal Complaint dated April 20, 2010 (Case No. 10-8082), Shapiro "directed others to create and show to the investors documents fraudulently touting Capitol's profitability. Those documents included: financial statements; profit and loss figures fraudulently representing that Capitol's wholesale grocery business was generating tens of millions of dollars in annual sales; personal and business tax returns for Shapiro and Capitol also fraudulently reflecting those sales; and numerous invoices fraudulently reflecting transactions between Capitol and other companies in the wholesale grocery business."^[4]

According to the criminal complaint, Shapiro incurred "millions of dollars in debts resulting from illegal gambling on sporting events; more than $400,000 for floor seats to the Miami Heat professional basketball team; approximately $26,000 monthly for mortgage payments on his residence in Miami Beach, which was recently appraised at approximately $5.3 million; approximately $7,250 monthly for payments on a $1.5 million Riviera yacht; approximately $4,700 monthly for the lease of a Mercedes-Benz automobile;" and an undisclosed amount "for a pair of diamond-studded handcuffs, which he gifted to a prominent professional athlete."^[4]

The FBI reported that he had diverted $35 million^[4] for his personal use from 2005 to 2009. Shapiro allegedly rented his yacht to NBA players Shaquille O'Neal, Dwyane Wade, and Kevin Garnett and pledged $150,000 to the University of Miami to have his name placed on the student lounge.^[3]

The scheme fell apart in November 2009 during the 2008-09 recession when Chicago real estate investor Sherwin Jarol sued to force him into involuntary bankruptcy after Shapiro had stopped making payments to his investors. More than 60 investors, largely from Naples, Indianapolis, and Chicago, including Barry Alvarez, had invested $600,000 in the scheme.^[3]

On April 21, 2010, he was charged in New Jersey with securities fraud and money laundering.

On September 15, 2010, he pleaded guilty before U.S. District Judge Susan D. Wigenton in Newark, New Jersey in U.S. v. Shapiro, 10-cr-00471, to one count of securities fraud and one count of money laundering. On June 7, 2011, he was sentenced to 20 years in federal prison and ordered to make $82,657,362.29 in restitution.^[4][5]

Shapiro was transferred from federal prison to home confinement on June 11, 2020, where he will continue to serve out the remainder of his 20-year sentence under monitoring by the Federal Bureau of Prisons (BOP). The transfer comes on the heels of recent federal prison directives to move some at-risk inmates to home confinement in the face of COVID-19 outbreaks. Shapiro, who was 51 at the time, was aided by having served over 50 percent of his sentence, while also demonstrating hypertrophic cardiomyopathy and hypertension, both of which put him at a higher risk of life-threatening complication if he were to contract coronavirus.

Shapiro was transferred to the home of a family member. He was to be monitored electronically by the Bureau of Prisons and subject to a range of the bureau's guidelines, which included a ban on the consumption of alcohol, random drug testing, and a monitored walking radius near the residence, and other criteria. He was also required to wear an ankle monitor at all times. He remained eligible to hold a job, although any work would require approval through the bureau and his earnings were garnished to repay remaining restitution to his victims.^[6]

Shapiro also faces a civil case in Miami, U.S. Securities and Exchange Commission v. Shapiro, 10-cv-21281.^[5]

Capitol Investments USA, Inc. was placed into involuntary Chapter 7 bankruptcy in the United States Bankruptcy Court for the Southern District of Florida before Judge Laurel M. Isicoff, after Chicago investor Sherwin Jarol filed a petition alleging Shapiro was concealing assets. Miami attorney Joel Tabas of Tabas Freedman was appointed as bankruptcy trustee and pursued clawback actions against financial institutions and professional firms that had facilitated or failed to detect the fraud. The trustee's recoveries included a $5.9 million settlement with Bank of America and a $5 million settlement with Greenberg Traurig LLP. Additional recovery litigation was handled by firms including Shook, Hardy & Bacon LLP, Levine Kellogg Lehman Schneider + Grossman LLP, Law Office of Mark S. Roher, and the Law Office of Maria Elena Perez, representing various creditor and investor interests throughout the proceedings.^[7]

In December 2024, President Joe Biden commuted Shapiro's sentence, which the Department of Justice stressed "does not imply forgiveness of the underlying offense, but simply remits a portion of the punishment." He was officially listed as released on December 22.^[8]