Ponzi Schemer Shapiro’s Associate Gets One Year in Prison for Tax Crime
A Naples, Florida, man who brought the most individuals into a $930 million Ponzi scheme was sentenced to one year and one day in prison for failing to report to tax authorities commissions he received.
Sydney Jack Williams, 63, was sentenced today by U.S. District Judge Susan Wigenton in Newark, New Jersey, according to a statement from U.S. Attorney Paul J. Fishman. In pleading guilty in September Williams admitted to getting people to invest in Capitol Investments USA Inc., a bogus wholesale- grocery distribution business run by Nevin Shapiro of Miami Beach, Florida. Shapiro, 42, was sentenced in June to 20 years.
“Williams received more than $12 million for bringing more than 60 investors to Capitol -- more money than any other individual received and for more investors than any other individual recruited,” according to Fishman’s statement.
Shapiro admitted he used money from new investors in Capitol to pay earlier ones, as well as to fund a lavish lifestyle, including making mortgage payments on a $5 million house and buying floor seats to Miami Heat basketball games. He is in the Federal Correctional Institution in Oakdale, Louisiana, according to the U.S. Bureau of Prisons website.
Williams’s lawyer, Martin R. Raskin of Coral Gables, Florida, didn’t immediately respond to a phone call seeking comment on the sentence.
Failure to Report
According to the prosecutor’s statement, Williams pleaded guilty to failing to report $1.7 million in income for 2005. He failed to report a total of $6.4 million in Capitol-related income for 2004 through 2007, on which he owed about $2.2. million in taxes, according to his charging document.
Williams, who faced a maximum sentence of three years, wasn’t accused of knowing Shapiro or Capitol committed fraud. He himself invested more than $100 million in Capitol and received $7 million in interest payments, though he ultimately lost $3 million when the scheme collapsed, according to prosecutors.
The people Williams recruited invested more than $307 million and lost more than $38 million, according to court papers.
Capitol, based in Miami Beach, was a so-called grocery diverter, which buys low-priced food in one region and sells it for a profit elsewhere, according to court papers. Shapiro told investors their money would fund his grocery business, according to an indictment.
Williams’s case is U.S. v. Williams, 11-cr-649, and Shapiro’s case is U.S. v. Shapiro, 10-cr-00471, U.S. District Court, District of New Jersey (Newark).
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