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The Real Deal Los Angeles

Mercer Vine’s office hits the market following SEC suit against Robert Shapiro

The residential brokerage was recently named as a “relief defendant” in a government lawsuit against the former Woodbridge head
By Natalie Hoberman | December 26, 2017 03:10PM

Robert Shapiro and Mercer Vine’s Beverly Hills office

Mercer Vine, the residential brokerage caught up in the firestorm of a major Securities and Exchange investigation-turned-lawsuit, put its office building in Beverly Grove on the market at an undisclosed price, according to a listing on Loopnet.

Robert Shapiro — who is at the center of the scandal — owns the 9,100-square-foot property at 8124 West 3rd Street, property records indicate. The property last traded in October 2016 for $9.8 million, records show. Mercer Vine occupies the entire second floor.

Shapiro resigned from his post as chief executive of Woodbridge Group of Companies earlier this month amid accusations that he has been duping more than 8,000 investors in a $1.2 billion Ponzi scheme. The Real Deal reported in November that the SEC had been investigating the corporation — made up of over 200 LLCs — since 2016. In the latest flurry of allegations, the SEC described the corporation as a “sham,” in which Shapiro apparently funneled revenue from new investors to satisfy debts owed to earlier investors “in classic Ponzi scheme fashion.”

TRD later uncovered that Shapiro was the leading figure behind the fast-growing brokerage Mercer Vine. The firm, which declined to comment for this story, was named a “relief defendant” in complaint the SEC filed on Dec. 20 on the grounds that it allegedly made money off the fraud.

“Without any legitimate basis, Mercer Vine received investors’ proceeds emanating from the Defendants’ securities fraud,” the lawsuit reads.

Now, the brokerage, which operated with a suspended license from September to December, is seeking to sell its headquarters. The property was listed for sale on Dec. 20 — the same day the lawsuit was made public and the SEC ordered Woodbridge to “freeze its assets.”

Yoav Sarraf of Concord Real Estate Services has the listing, according to marketing materials.

News of the listing follows the recent departure of one of Mercer Vine’s top agents, Lisa Optican, to Compass. And industry leaders close to the troubled brokerage suspect Optican won’t be the last to jump ship.

“Lisa was the first domino to fall,” a source said. “My guess is they’re going to have more fallout. I think they’re going to shut down.”

Yet there aren’t too many agents left at the firm whose loss would make an impact at this point, another source said. Aside from Mercer Vine co-founder Adam Rosenfeld, senior partner Justin Mandile is the other top-producer at the firm. Mandile left the Agency to join Mercer Vine in May, but now some wonder whether he will return to his former gig.

Mandile confirmed he is still at the firm, but declined to comment further. The Agency could not immediately be reached for comment.

Further complicating matters is Mercer Vine’s $180 million listing of the prominent Owlwood Estate. The SEC ordered Woodbridge and Shapiro to freeze their assets and essentially stop business operations pending a hearing on Friday. This would effectively prohibit the sale or marketing of the historic property.

“If there is an order to freeze assets in place against the owner of a property, then presumably the property cannot be sold, or cannot be sold without the permission of the SEC,” said Jonas Grant, an L.A.-based attorney who practices corporate entities law. “Mercer Vine’s efforts to broker the sale of a property subject to a freeze order would likely be fruitless, if not illegal.”

The defendants, including Mercer Vine, will have the opportunity to fight the order at the hearing.