University of Miami

Accused Ponzi swindler Nevin Shapiro had a knack for making prominent connections

Miami Heat star Dwyane Wade took rides on Shapiro's $1.5 million Riviera yacht. Shapiro, now jailed on federal charges, boasted of giving Shaquille O'Neal a pair of diamond-studded handcuffs as a birthday gift. Two sources recall a photo of the seven-foot-one NBA legend bench-pressing Shapiro like a dumbbell.

And when Shapiro's sometime dining companion Carlos Noriega, Miami Beach police chief, met U.S. Attorney General Eric Holder at South Beach's Prime 112 steakhouse, Shapiro was there to get his photo snapped with the nation's top law enforcement official, a police spokesman confirmed.

"He would always say, 'I have to go meet this NFL player or this NBA player, "' said Adam Meyer, a sports handicapper in Plantation who runs and said he advised Shapiro on sports bets. "If you go into the house, it's pictures of him with all different famous athletes. Dwyane Wade on the boat with their arms around each other. Shaq bench-presssing him."

Federal prosecutors say Shapiro used his wealth and prominent connections to bolster an image of a successful grocery broker selling stakes in lucrative import deals.

In reality, prosecutors claim, the 41-year-old's business existed mostly on paper for the past five years. They claim the scam cost roughly 60 investors at least $80 million.

Shapiro allegedly pocketed about $35 million -- enough to finance a voracious gambling habit, a $6 million Miami Beach mansion, and the personal bodyguards that were often spotted with Shapiro, according to court documents and interviews with people who know him.

Days after his arrest in New Jersey, a portrait is emerging of a man who pursued high-profile friends while trying to establish himself as a power broker in South Florida's sports circles. He spent $400,000 on Miami Heat floor seats, has a student-athlete lounge named after him at the University of Miami, and talked of starting his own sports management firm.

Court papers also describe a man who lost millions gambling on sports and handed out jewelry like cash, often to cover debts toward the end of the alleged scam. Last fall, investors successfully sued to force Shapiro into bankruptcy in an effort -- fruitless so far -- to collect money from him.

In a March 15 affidavit filed as part of Shapiro's bankruptcy case, he describes the fate of two rings worth more than $120,000 that he purchased in late 2008.

"One of the two rings was lost when it fell off a boat approximately one to two months after purchase, " Shapiro wrote, "while the other was given to Raul (no last name and contact information unknown) at Smith & Wollensky approximately one month after purchase."

Shapiro's lawyers have declined to comment on the case.

While the Shapiro business cycled through about $880 million since the alleged scam began in 2005, investors and creditors probably lost between $80 million and $120 million, said Joel Tabas, the Miami lawyer named trustee of the bankruptcy estates for both Shapiro and his company, Capitol Investments USA.

Tabas said prosecutors' estimate of Shapiro's $35 million windfall could be correct, citing Shapiro's costly lifestyle. "Just the carrying costs on the Miami Beach home on North Bay Road were $50,000 a month, " Tabas said.

The creditor roster in the bankruptcy cases lists $133 million in unsecured claims from about 100 creditors. Tabas said the list of creditors largely mirrors prosecutors' list of alleged fraud victims.

If so, most of the supposed victims came from outside South Florida, with a concentration in Naples, Indiana and Chicago.

Five creditors list Coral Springs addresses, and there a few from Miami-Dade County. Most individual claims are for less than $500,000, though 27 are for more than $1 million and a few top the $8 million mark.

No one has suggested Shapiro's prominent acquaintances had any connection to the alleged Ponzi scheme -- including as investors.

None are listed as creditors in various bankruptcy filings that appear to list a significant number of alleged victims.

It's unclear how Shapiro came to know O'Neal or Wade, or the extent of his relationship with them.

A source close to Wade said he and Shapiro got to know each other when Wade rented a Miami Beach house for seven months from a woman a lawyer familiar with the case said was dating the single Shapiro.

"Because of that, [Wade] had been on his yacht a couple of times, " the source said. "I think Dwyane considered him an acquaintance, not a friend."

Tisha Kresler, Wade spokeswoman, said Wade did not receive any gifts from Shapiro or invest any money with him.

"Dwyane was just as shocked as anyone else to find out" about Shapiro, Kresler said.

Shapiro was at least a social acquaintance of Chief Noriega and past members of the Miami Beach police brass at a time when O'Neal volunteered for the department and was friendly with top officers, according to police records and a union representative.

"He was hanging out with [former chief] Don De Lucca, " said Miami Beach Det. Gustavo Sanchez, a vice president for the Fraternal Order of Police union representing city officers. "That was his big connection in the department"

In announcing charges against Shapiro last week, prosecutors said he used "stolen funds" to purchase diamond-studded handcuffs that he gave as a gift to a "prominent professional athlete."

Meyer, the sports handicapper, said Shapiro boasted of giving the cuffs to O'Neal as a birthday present. "He was invited to Shaq's birthday, " Meyer said.

Meyer said Shapiro described socializing with O'Neal, Wade and other Heat players.

"The Heat guys used his boat, " Meyer said. "He called Dwyane Wade in front of me several times because I didn't believe him.'

Wade declined to be interviewed. A spokeswoman for the Cleveland Cavaliers did not respond to an inquiry Friday requesting comment from O'Neal, now a player on that team. Former Chief De Lucca also did not respond to an e-mail sent to the consulting firm that lists him as an executive.

In an e-mailed statement, the Miami Beach Police Department described Shapiro as an "acquaintance" of Noriega's "no different than that of the thousands of residents, business owners, and community members he comes into contact with as part of his daily duties" as chief.

Police spokesman Wayne Jones described one social encounter last year between the two that brought Shapiro to a favorite haunt -- Prime 112, South Beach's top steak house and a regular stop for O'Neal and other top athletes.

That night, Noriega was scheduled to meet Holder there after his department assisted with Holder's security detail during the attorney general's visit. At one point, Shapiro came over to Holder's table and had himself photographed with him, Jones said.

Afterward, Noriega joined Shapiro's table for dinner, Jones said.

The chief and Shapiro were sharing a meal at David's Cafe on Lincoln Road on July 31 when Shapiro's cellphone rang. On the other end: an angry Gary Arzt allegedly threatening to "put a bullet in you, " according to a police report on the incident.

Det. Sanchez, the union officer, was dispatched to the July 31 incident and wrote the report.

Arzt, a 69-year-old Miami Beach retiree, said Saturday he was trying to get Shapiro to stop bothering a University of Miami student who Shapiro had hired and then fired as a personal assistant. "It wasn't a real threat, " Arzt said, adding he didn't threaten to shoot Shapiro. "Normally I would indicate I would hire someone who would break their legs."

Shapiro did not file charges against Arzt. He told Sanchez that the student, who did not play football, owed him $12,000 for wrecking Shapiro's car.

According to the report, Arzt did not pause when Shapiro said the Miami Beach police chief could hear. "We're gonna kick your face in, " Arzt allegedly said, according to the report. "I don't give a [hoot] who's listening

Related stories from Miami Herald