Published: Apr 22, 2010 11:39 AM EDT

      NEWARK, N.J. (AP) - Federal prosecutors say a Florida man
accused of running a $880 million Ponzi scheme used proceeds from
duped investors to fund a lifestyle so lavish he had a university
athletic lounge named after him and once bought a professional
athlete a pair of diamond-studded handcuffs.
      Nevin Shapiro, wearing standard issue handcuffs Wednesday, stood
before a judge in a New Jersey federal courtroom to face money
laundering and securities fraud charges. He's accused of leaving at
least 60 investors in Florida, Indiana and New Jersey with about
$80 million in losses after the scheme collapsed.
      Shapiro remained in custody Wednesday with bail set at $10
million.
      His attorney, Michael Tein, acknowledged an e-mail request for
comment but had not responded Wednesday evening.
      Prosecutors say 41-year-old Shapiro of Miami Beach, used a
Florida-based company called Capitol Investments, USA, Inc., to
raise nearly $900 million from investors who thought they were
buying into a wholesale grocery distribution business.
      Shapiro allegedly siphoned at least $35 million of the proceeds
for personal use, including $23 million for salaries and
commissions for himself, $5 million for a Miami Beach mansion and
$400,000 for courtside Miami Heat basketball tickets. He also spent
lavishly on luxury cars, a high-stakes gambling habit and the
handcuffs given to an unnamed player, according to court documents.
      Shapiro also was generous with what prosecutors contend was his
investors' money, donating to athletic groups and charities and
getting a student athlete lounge named after him at the University
of Miami by donating $150,000.
      Charges filed by the Securities and Exchange Commission claim
Shapiro promised investors risk-free annual returns as high as 26
percent by persuading them to invest in a "grocery diversion"
enterprise - a practice of buying low-cost groceries in one region
of the country and reselling them in higher-priced markets.
      Investigators say Shapiro had no legitimate business holdings
and kept the alleged scheme going by providing investors with
fabricated invoices, fake purchase orders and bogus financial
statements whenever one inquired about his returns.
      "Nevin Shapiro is charged with tricking investors with false
documents and false promises," U.S. Attorney Paul Fishman said in
a statement. "He spent tens of millions of their money on gambling
debts, lavish gifts and a luxury lifestyle built on a house of
cards."
      Shapiro allegedly hid losses from investors by paying out
principal to his current clients with money from new investors
raised between January 2005 and November 2009. The funds dried up
late last year, and he was unable to cover outstanding promissory
notes, prosecutors said.
      Shapiro is in bankruptcy proceedings, according to the SEC
complaint. U.S. Magistrate Judge Madeline Cox Arleo said Wednesday
during Shapiro's Newark court appearance that he probably could not
use his Florida home as bail collateral because it is in
foreclosure.
      The securities fraud charge carries up to 20 years in prison and
a maximum $5 million fine if convicted. Shapiro also faces 10 years
of prison time and up to $250,000 in fines on the money laundering
charge.