A Florida man who steered investors to a $930 million Ponzi scheme was sentenced to one year and one day in prison for failing to report commissions he received to tax authorities.
Sydney Jack Williams, 63, of Naples, was sentenced today by U.S. District Judge Susan Wigenton in Newark, New Jersey. 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 in prison.
“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 a statement from U.S. Attorney Paul J. Fishman.
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, who faced a maximum sentence of three years, wasn’t accused of knowing that Shapiro or Capitol had committed fraud.
“We thought the judge’s sentence was a fair one,” his lawyer, Martin R. Raskin of Coral Gables, Florida, said in a phone interview. “She recognized that Jack had no knowledge of Nevin Shapiro’s Ponzi scheme. It was really important to the court and to Jack for people to know that.”
According to the prosecutor’s statement, Williams pleaded guilty to failing to report to the U.S. Internal Revenue Service $1.7 million in income for 2005. For 2004 to 2007, he failed to report a total of $6.4 million in Capitol-related income, on which he owed about $2.2 million in taxes, according to his charging document.
Williams 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-00649, and Shapiro’s case is U.S. v. Shapiro, 10-cr-00471, U.S. District Court, District of New Jersey (Newark).