A federal grand jury has formally indicted a Miami Beach businessman who was arrested for fraud in April for allegedly running a nearly $900 million Ponzi scheme involving his grocery distribution business.
Nevin K. Shapiro, founder and president of Capitol Investments USA, Inc., is facing one count each of securities fraud and money laundering, one count of conspiracy to commit securities and wire fraud, two counts of wire fraud, and one count of money laundering.
The 41-year-old Shapiro has been in federal custody since he surrendered to authorities in Newark, N.J., on April 21.
According to prosecutors, Shapiro promised investors a risk-free, up to 26 percent annual return for buying into his grocery diverting business. But as business ground to a halt, Shapiro began to use new investor funds to pay back old investors, according to the indictment.
Shapiro used the investors' money to "fund his own lavish lifestyle" and pay for unrelated business ventures. Among those lavish expenses were his $5 million Miami Beach home, his $1 million boat, expensive cars and clothes, high-stakes gambling and season tickets to the Miami Heat and other sporting events.
Shapiro, a major donor to the University of Miami's sports program, allegedly even used some of the stolen funds to buy a pair of diamond-studded handcuffs, which he supposedly gave as a gift to former Heat center Shaquille O'Neal.
O'Neal later said that he and Shapiro were acquaintances, but that Shapiro had merely helped him get a deal on the diamonds for the handcuffs.
Over 60 investors provided Shapiro with over $880 million from January 2005 through November 2009, losing over $100 million in the scheme, according to the indictment.
If convicted, Shapiro faces 20 years in prison and a fine of as much as $5 million for the securities fraud charge, 20 years and a $250,000 fine for the wire fraud charges, and 10 years and a $250,000 fine for the money laundering charges.