When real-estate developer Woodbridge Group of Companies bought the famous Owlwood estate in Los Angeles in September 2016, the $90 million transaction marked the pinnacle of a nearly four-year property acquisition spree, according to a WSJ Pro Bankruptcy analysis. The company announced it planned to preserve the 1930s-era, Holmby Hills property — once owned by Tony Curtis and later by the pop duo Sonny & Cher — renovate it and add square footage before relisting it. By July 2017, with none of the work completed, Woodbridge put the property back on the market for $180 million, far above the record price for a Los Angeles home. In a statement announcing the listing, Woodbridge chief executive Robert Shapiro said he’d assembled a team of well-known architects to convert and upgrade the property. He said that the home had gotten significant market interest after the music mogul Jay-Z hosted a Grammy Awards party there earlier that year. According to the Securities and Exchange Commission, Shapiro was actually operating the company as a $1.2 billion Ponzi scheme, in which storied estates like Owlwood were a lure to draw investors. The SEC lawsuit, filed in December, claims that the company, controlled by Shapiro, sold unregistered securities to an estimated 7,000 retail investors — many of them elderly — who were told their funds would provide secured, short-term real-estate loans.
