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A judge with the United States District Court Southern District of Florida ordered Woodbridge Group of Companies to pay $1 billion. The company collected the funds from 8,700 investors. The United States Security and Exchange Commission (SEC) claims the Woodbrige Group was operating a Ponzi scheme. Now, the judge says that they must pay people who invested in the company. Many of those investors were elderly living in Florida.

Woodbridge Group of Companies

Robert Shapiro owns Woodbridge Group of Companies. He sold investors on the idea that their investment would grow by 5 to 10 percent annually. He told the investors that he would put their funds together and loan them to commercial entities. These entities were to pay the funds back along with 11 to 15 percent interest. Instead, Robert Shapiro loaned most of the money to over 275 companies that he owned. Not a dime was ever repaid. Shapiro would take new funds collected and pay those who had already invested.

Stopped Paying Investors

Eric Bustillo, the director of the SEC's office in Miami, says the scheme came to light when the company stopped paying investors. Then, Woodbridge went to court in December 2017 seeking bankruptcy protection. Woodbridge claimed that rising costs from litigation and compliance made them go bankrupt.

13 Producers Obtained Money From 4,400 People

Top producers for the company were also charged with wrongdoing. The SEC charged 13 producers with selling more than $350 million in unregistered securities. More than 4,400 people brought the securities from these 13 individuals. The producers told the investors that their money would be safe and secure.

Barry Kornfeld

One of those producers was Barry Kornfeld. Along with Ferne Kornfeld, the pair netted more than $3.7 million dollars from selling the unregistered securities. This is not the first time that Barry has been in trouble with the SEC. The SEC found him guilty of selling illegal collateralized mortgage obligations to investors from 2004 to 2007. None of those mortgages were secure. A court had ordered that he was never to sell investments again. The Kornfelds agreed to pay $3.69 million plus $690,497 in interest. They also agree to pay over $650,000 in penalties and agreed to never sell stock again.

Jordan Goodman

The SEC also contends that Jordan Goodman received money from the company. He worked as a media influencer without disclosing the fact to the SEC. Goodman has agreed to pay $2.29 million to the government along with another $690,497 in interest. He also agreed to pay a $500,000 penalty.

What Can Seniors Do?

The SEC recommends that seniors who think they may be getting involved in a Ponzi scheme use their website to investigate companies. They maintain a list that seniors can check before investing any money. They say that investors should be leery of any investment that promises a large return with very little risk. The SEC also says that getting consistent returns is highly unlikely because all investments go up and down in value.

It is still unknown if investors will get any of their money back. The court is likely to appoint a professional administrator. This person will represent investors in ongoing litigation. Meanwhile, the bankruptcy court in Delaware is likely to appoint trustees. The trustees will try to raise as much money as possible to handle the company's debts. Officials say it is unclear who will be paid first.

Comerica Bank of Dallas handled much of the money. There is a class-action lawsuit against the bank. The lawsuit maintains that the bank did not see red flags that should have warned them that a Ponzi scheme was taking place.