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New Jersey Ponzi Scheme Involving $880 Million Results in Two Guilty Pleas

New Jersey Ponzi scheme involving approximately $880 million results in two guilty pleas. The father and son duo entered their guilty pleas before U.S. District Judge, Susan Wigenton, in Newark, New Jersey, on Monday, April 4, 2011.

According to U.S. Attorney Paul Fishman, 76-year-old Roberto Torres, and his son, 39-year-old Alejandro Torres, each pled guilty to one count of security fraud for helping their firm's owner operate a Ponzi scheme involving approximately $880 million.

The alleged investment scam was operated under Capitol Investment USA, Inc, where Roberto served as the CFO. According to prosecutors, the Ponzi scheme was tied to a fake grocery distribution business which resulted in more than 50 investors losing between $50 million to $100 million. The reported scheme ran from January 2005 to November 2009.

Nevin Shapiro, Capitol Investment's chief executive, pled guilty last September to securities fraud and money laundering.

Mr. Shapiro has been accused of using the money to purchase a $5 million Miami Beach home, a $1.5 million Riviera yacht, and an expensive Mercedes-Benz. The Torreses have admitted to helping Mr. Shapiro lure unsuspecting investors into investing in the fictitious grocery distribution business.

Mr. Shapiro is scheduled to be sentenced on May 13, 2011. The Torreses are expected to be sentenced on July 12, 2011. Each defendant could receive up to 20 years in prison and a $5 million fine.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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