On January 6, 2022, Ryan Shapiro, the 44-year-old founder of prison financial services firm JPay, was charged in federal court in Boston with conspiracy to commit securities fraud. Also cited in the criminal complaint was Shapiro’s friend and neighbor in Florida, hedge fund manager Kris Bortnovsky, 40.


Ryan Shapiro
Ryan Shapiro

JPay was acquired in April 2015 by prison communications major Securus Technologies, Inc. Both are now divisions of Dallas-based Aventiv Technologies.

A third defendant, referred to in the probable cause document as ‘Cooperating Witness 1’ (CW-1), gave incriminating evidence against the other two in return for leniency. The charge complaint mentions a third suspect, David Schottenstein, 38, identified by the Miami Herald as a “member of one of America’s richest families.”

In a sworn document, CW-1 stated that he disclosed insider knowledge that Shapiro and Bortnovsky utilized to profit from the stock market on three distinct occasions:

• shortly before a positive earnings report announced on August 22, 2017, by DSW, whose board includes two of Schottenstein’s cousins;

• shortly before a merger was announced on February 20, 2018, between Albertson’s and Rite-Aid, of which the same cousins had insider knowledge; and

• shortly before a hostile—and ultimately unsuccessful—takeover of Canadian marijuana distributor Aphria was announced on December 27, 2018, by Green Growth Brands, of which one of the same cousins had insider knowledge, as well.

Insider Information

Illegally using their insider information, Shapiro and his co-defendants reportedly executed advantageous stock trades that yielded profits totaling $121,000 for the JPay founder, $600,000 for Schottenstein and $3.56 million for Bortnovsky and his Sakal Fund. See: Securities and Exchange Commission v. Schottenstein, USDC (D. Ma.), Case No. 1:22-cv-10023.

Ryan Shapiro Founder Of Jpay

It’s not the first time the stench of corruption has tarnished Shapiro’s image. He came under attention in 2016 during a larger examination into contracts inked by the New York City Department of Corrections (DOC) with JPay and Western Union, both of which skirted state bid-procurement procedures. The city’s then-Public Advocate, Letitia James—currently the state Attorney General—asked the state Department of Investigation investigate into the awards.

“We need full transparency and accountability into how these contracts have been settled and executed, and whether any laws were broken,”

Letitia James

The contracts appear to contravene New York City law, which restricts money-transfer fees charged to prisoners and their families to a maximum of $5.00 per transaction, whereas JPay charges $6.95 for transfers of $20 to $100 and Western Union charges the same for transfers of $30 to $75. But the state Corrections Department has granted both corporations an exception to the legislation annually since 2010, according to Bronx Justice News.

New Jpay Device

Other Co-Defendants?

Jpay Terminal

Shapiro is also a member of The Shul, a synagogue in Bal Harbor, Florida, where he serves on its executive board and is a mentor for the congregation’s chapter of the Solomon Leadership Program (SLP) (SLP). A other member, Murray Huberfield, was sentenced in June 2021 to a seven-month prison term for his role in a bribery scam that also won a 58-month prison stint for the long-time President of the New York Corrections Officers’ Benevolent Association (COBA), Norman Seabrook. Huberfield pleaded guilty to giving Seabrook a $60,000 bribe in return for an investment of $20 million of union money in Huberfield’s hedge fund. Huberfield then donated $125,000 of the money to The Shul. Shapiro denies any ties.

“Just because you assume they practice in the same religious establishment and live in similar neighborhoods does not mean they have any type of relationship,” chastised Jade Trombetta, Shapiro’s publicist.

Yet some are not convinced. As one DOC insider informed the New York Daily News:

“All of these coincidental circumstances remind me of Arsenio Hall’s catchphrase, ‘Things that make you go hmm.’”

The Shul features predominately in several of Shapiro’s business activities. He is on the executive board, which received Huberfield’s $125,000 donation. Another synagogue member, Errol Feldman, helped launch JPay, eventually taking over as CEO in 2016. Feldman was also listed as an SLP mentor, with a bio on the program’s website that reads he “was able to navigate a variety of complex regulatory landscapes” for JPay “while making sure the company never stopped moving forward.”

The Shul also hosts the Aleph Institute, which provides prison ministry services to Jewish prisoners around the country. Shapiro served as vice president of the Aleph Institute for several years, until roughly 2014.

What the Future Holds

Jpay Terminal

Shapiro’s SLP bio says that JPay “has transformed much of how US prisons operate today.” It further says he is now working on “a secretive startup creating the world’s first 4G LTE wearable products,” as well as investing “in emerging technologies, with a heavy focus on Agritech companies.”

SLP’s webpage notes that mentors are “handpicked, not only for their personal success, but for their outstanding values and exemplary moral conduct.” But the SEC’s sworn federal complaint—which says Shapiro lied about his contact with Bortnovsky and about illegally selling shares on insider information—just might give the lie to that argument.

Sources: PLN, Bronx Justice News, Miami Herald, New York Daily News, Solomon Leadership Program