AFP, Washington, April 4: A father and son who created fake earnings documents to dupe clients in an $880 million Ponzi scheme both pleaded guilty Monday to one count of securities fraud, US prosecutors said.
Roberto Torres, 76, and his son, Alejandro Torres, 39, both face up to 20 years in prison for helping Nevin Shapiro, the former chief executive of Capitol Investments USA, who pleaded guilty last September to one count of securities fraud and one count of money laundering.
Roberto Torres was Capitol's chief financial officer and his son was an accountant with the company—their sentencing is scheduled for July 12.
Shapiro ran a fake wholesale grocery distribution business in Florida, taking in $880 million between 2005 and 2009, using new investor funds to make principal and interest payments to existing investors, authorities said.
The father and son admitted to creating false documents including profit and loss reports, invoices for Capitol transactions and tax returns for Shapiro, who spent millions of dollars on a 'lavish lifestyle,' prosecutors said.
They admitted that more than 50 investors lost a total of between $50 million to $100 million, prosecutors said.
The Torres father and son pleaded guilty in a federal court in Newark, in the eastern state of New Jersey.