Bristol businessman Peter Holler, who has been selling securities for more than 40 years, is one of hundreds of representatives around the country caught up in a $1.3 billion investment Ponzi scheme, which resulted in his suspension as a broker.

In October, former Woodbridge Group of Companies CEO Robert Shapiro — not the celebrity attorney — will be sentenced in federal court in southern Florida after pleading guilty to charges related to the Ponzi scheme. Shapiro, 61, faces up to 25 years in prison.

“I was a victim of the Woodbridge debacle just like about 8,400 or so others,” Holler, who was suspended for two years in 2018 by the Financial Industry Regulatory Authority, told the Bristol Herald Courier. “I was one of several hundred representatives who marketed what appeared to be a completely legitimate direct loan program that used first position liens on valuable real estate to provide security for loans to third parties.”

Holler, 73, failed to provide notice to his firm prior to selling Woodbridge securities, which resulted in his suspension, according to the federal regulator. He received $49,790 in commissions from the sales and had to return it as a result of the suspension.

Holler said he learned about Woodbridge in 2016, when he was told about the firm’s “safe and secure direct loan program” that was supposed to have a 5% to 8% return. The firm was represented at industry conferences and sent out slick marketing materials, he said.

Holler said he agreed to represent the firm locally and ended up selling Woodbridge’s promissory notes to 24 clients. A promissory note is a legal form that documents a loan between two parties. Notes purchased by Holler’s clients, who lived in the Tri-Cities and Knoxville areas, ranged from $25,000 to nearly a half-million dollars.

Everyone — including Holler — expected to receive a return on the investments. Holler said he placed $75,000 of his own money into Woodbridge projects believing the programs were a “very safe place” to receive a fair return.

After a year of selling Woodbridge notes, Holler said he was hit with a “ton of bricks.” Sellers learned on Dec. 4, 2017, that Woodbridge filed for bankruptcy.

Details soon began to emerge that Shapiro was operating a Ponzi scheme.

Before then, Holler said no one, including himself, had any idea that they were doing anything other than what had been presented to them. He said he would have never sold notes for Woodbridge or spent his own money if he had known it was a Ponzi scheme. There were no red flags, he said.

The Woodbridge programs were represented as a direct loan program between businesses seeking funds who had real estate property free of any liens to pledge as collateral and individuals who were seeking a reasonable return on their money, he said.

Holler said the concept appeared to be legitimate and a straightforward means of providing funds to third parties.

Federal prosecutors said that despite Woodbridge’s claims that the investments would be backed by third-party properties, they were secretly owned by Shapiro. Unknown to investors, Shapiro created and controlled a network of more than 270 limited liability companies, which he used to acquire and sell the properties pitched to investors, prosecutors said.

In addition, Shapiro falsely claimed that Woodbridge was profitable and advertised high rates of return to investors. The real estate portfolio failed to generate sufficient cash flow to satisfy the loan obligations and interest payments owed to investors, prosecutors said.

To make up for the cash deficiency, prosecutors said Shapiro resorted to making Ponzi payments; hundreds of millions of dollars were moved around from new investors to older investors, prosecutors and Holler said.

According to the indictment, Shapiro misappropriated approximately $25 million to $95 million for himself. He spent $3.1 million on chartering private planes and travel, $6.7 million on a house, $2.6 million on home improvements, $1.8 million on personal income taxes and more than $672,000 on luxury automobiles, the indictment states. 

Following the bankruptcy and Shapiro’s guilty plea, a liquidation trust was created to help give victims back some of their money. Thousands of claims have been made, including by Holler and all of his clients. So far, they’ve received one check equaling 5 percent of their investment.

Woodbridge’s properties are being sold to raise funds and Holler estimated that about 500-600 properties are still available. Other assets, including artwork by Pablo Picasso, are being sold.

Holler said the best-case scenario would be for the victims, who often invested their retirement funds, to receive the entire amount lost in the scheme. But he added that he doesn’t expect everyone to receive the entire amount lost.

The representatives who sold notes for Woodbridge likely did not know it was a Ponzi scheme, Holler said.

However, many of the representatives, including Holler, have been suspended by federal regulators for not properly registering to sell the notes for Woodbridge.

When Holler’s suspension ends next year, he said he does not plan to continue selling securities. He currently works as an insurance benefits representative, which is not affected by the suspension. He was working with Securities Services Network in Knoxville, Tennessee, but was terminated due to the scheme.

“In retrospect, the registration process might have detected what Mr. Shapiro was doing and prevented the extensive losses that have been incurred by those who loaned their funds to Woodbridge,” Holler said.

But there was no registration process because those selling for Woodbridge thought they were selling loans rather than securities.

California attorney John T. Hermann told the Detroit Free Press that he believes Woodbridge targeted sales agents who already had an established business by offering better than typical commissions.

In some cases, he said, sales agents may not have intended to cheat anyone. 

Holler said he continues to monitor the case and assist his clients with claims.

State and federal officials did not respond to questions for this story.

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