News story re: Doris Nelson. How many involved are Witnesses?
UPDATE IN TODAYS PAPER. Looks like a lot of money was paid to "recruiters".
Doris Nelson sentenced to nine years in prison for Little Loan Shoppe fraud
Kip Hill The Spokesman-ReviewDoris Nelson Elizabeth Kelley fraud jeffry finer ponzi scheme sentencing U.S. District Court
Editor’s note: A previous version of this story misidentified Caitlin Baunsgard, the U.S. Assistant Attorney who prosecuted the case, and incorrectly identified Jeffry Finer’s affiliation with regard to the case. This story has been updated to correct and clarify.
A sobbing Doris Nelson apologized Monday to hundreds of people who lost money to an investment scheme she ran for years to support her Little Loan Shoppe online lending business in Spokane. U.S. District Judge Robert Whaley then sentenced her to nine years in prison.
“I don’t quite buy that you began evil,” Whaley told her.
Nelson’s apology met with scoffs from several onlookers who left the courtroom angry. Federal prosecutors wanted Nelson to spend 30 years in federal prison for bilking investors of about $50 million.
Whaley said such a long sentence would verge on vengeance rather than justice.
Nelson pleaded guilty in April to 110 criminal counts of wire fraud, mail fraud and money laundering. There was no plea agreement with prosecutors.
She then retained new lawyers and attempted to withdraw her plea. She failed. She tried again Monday before the sentencing and failed again.
Nelson’s attorney Jeffry Finer said late Monday he is unsure whether Nelson would ask to pursue further legal appeals based on a sentencing result “that was far better than we had feared.”
“I don’t know whether a trial would bear a lower sentence,” said Finer, who worked with attorney Elizabeth Kelley on Nelson’s behalf.
Testifying on Monday were several federal agents assigned to Nelson’s case, which was launched by Canadian authorities in 2001. Also testifying was a longtime employee of Nelson’s, Brittany Becker, who detailed seven years with the Little Loan Shoppe and its undoing that occurred shortly after the economic downturn of 2008.
Much of the questioning by Finer dealt with the details of the federal government’s investigation. An 18-page “master list” of investors in what the government described as a Ponzi scheme was presented as evidence by the government that somewhere around $48 million was lost.
“This is the largest Ponzi scheme in the Eastern District of Washington, and the second-largest in the state of Washington,” said U.S. Assistant Attorney Caitlin Baunsgard.
But Finer questioned where the numbers came from that supported the so-called master list of investors, who put money into Nelson’s business that was then supposed to be used to make high-interest payday-type loans.
The government said Nelson instead used some of the newer investor funds to pay on older ones as the business faltered. Prosecutors also said Nelson used the money to fund an extravagant lifestyle.
Many investors who lost money live in Canada and are members of the Jehovah’s Witness religious community, a factor Baunsgard pointed out in asking that Nelson spend 30 years behind bars.
Whaley ruled Nelson’s scam was not a Ponzi scheme, a finding that allowed defense attorneys to add the amount earned by some investors to the money lost by others and arrive at a total $19 million loss from the scheme. That amount was below a $20 million cutoff for a harsher prison sentence.
Whaley, however, would not rule that Nelson’s actions affected just 40 victims, an argument Kelley made based on the number of victim impact statements received by the courts.
“There are real people you hurt bad,” Whaley said, acknowledging that, as an attorney, he defended a Ponzi scheme case before being assigned to the bench.
Baunsgard asked Whaley to make an example of Nelson, given the notorious reputation Spokane has received in the national press as the fraud capital of America.
Nelson’s nine-year sentence comes a year after Greg Jeffreys also pleaded guilty to defrauding investors out of a little more than $9 million. Jeffreys received an eight-year prison sentence.
Prosecutors will plan to seek $50 million from Nelson to repay investors.
“This is not a number we ask for lightly,” Baunsgard said of the request for 30 years’ imprisonment. “Especially in a fraud case.”
Kelley accused the government of demonizing Nelson, who she patted on the arm and hugged after the sentence was read.
“Doris Nelson is not Spokane’s Bernie Madoff,” Kelley said. “She is a good and trusting woman who got caught up in something that was way over her head.”
Whaley ordered that Nelson may self-report to prison, to which the defendant replied, “God bless you.”
to which the defendant replied, “God bless you.”
So, clearly not a Witness. Which is why I'm still unsure why so many JWs invested with her. What was her connection to the religion? Or was it just that some high-profile JWs happened to invest first, and they recruited others who trusted them?
I know of many people involved in this specific investment scheme.
When the deal was being spread around, many prominent witnesses in the Vancouver, BC / Lower Mainland area were involved and encouraging others to get in on the investment. Some were honest-hearted in their intentions and thought they were "being blessed" to continue in their pioneer service. I know of one that mortgaged their house at the insistence of elders & pioneers, since it was a sure thing and it would allow them to start to pioneer.
I also know of another couple that have an extremely bad name in business (paying brothers & sisters minimum wage, etc) while owning many foreign properties. They seem to be unscathed at the moment and living well in a small town escaping their huge debt.
I was offered the deal but declined since it "sounded too good to be true". The idea was you'd get all your money back within the first 2 years in dividends and they'd continue on afterwards. For some people, it was definitely enough to live on.
While I don't have a lot of empathy for people who get involved in these schemes - the unfortunate part is many were duped into it and persuaded by "spiritually strong ones".
This is an example of Affinity Fraud:
Affinity fraud includes investment frauds that prey upon members of identifiable groups, such as religious or ethnic communities, language minorities, the elderly, or professional groups. The fraudsters who promote affinity scams frequently are – or pretend to be – members of the group. They often enlist respected community or religious leaders from within the group to spread the word about the scheme, by convincing those people that a fraudulent investment is legitimate and worthwhile. Many times, those leaders become unwitting victims of the fraudster's ruse.
These scams exploit the trust and friendship that exist in groups of people who have something in common. Because of the tight-knit structure of many groups, it can be difficult for regulators or law enforcement officials to detect an affinity scam. Victims often fail to notify authorities or pursue their legal remedies, and instead try to work things out within the group. This is particularly true where the fraudsters have used respected community or religious leaders to convince others to join the investment.
Many affinity scams involve "Ponzi schemes" or pyramid schemes, where new investor money is used to make payments to earlier investors to give the illusion that the investment is successful. This ploy is used to trick new investors to invest in the scheme and to lull existing investors into believing their investments are safe and secure. In reality, the fraudster almost always steals investor money for personal use. Both types of schemes depend on an unending supply of new investors; when the inevitable occurs, and the supply of investors dries up, the whole scheme collapses and investors discover that most or all of their money is gone.
JWs are ripe for this as they tend to be overly trusting of people claiming to be members (why child protection is such an issue as well).
They are still victims and don't deserve to have a fraudster take their money - some of the heartless comments that seem to 'rejoice' at their loss are pretty low and that attitude isn't welcome here. The victims are more likely to be naive and trusting as greedy - those tend to be the fraudsters, I think some people have lost sight of who the victims are here. Just because someone is a JW doesn't make them evil.
There are many cases on a more local level that never hit the news where the elderly are often taken advantage of - it may be with good intention but poor business sense and they end up losing out because of bad management of a business they have invested in and feel unable to persue the matter because elders will use the "don't take brothers to court" teaching to avoid the congregation being exposed to bad publicity.
A JW Aunt and my Mother in Law were victims of a scam like this. Promised a 30% return. Got a couple of checks and recruited other JWs to join. Everyone -mostly elderly lost 100% eventually and the perp retired to Mexico.
I tried to involve the DAs office but the JWs refused to cooperate or testify against a "Brother".
I can see why some cons target JWs.
I remember the name Dill from when I was a JW about 35 years ago. Lived in W Washington. Wonder if it is the same family? I believe the ones I am thinking of were fairly prominent since I remember the name, but I know they were not in my immediate congregation. I wonder if that is why my mom is broker than she oughta be?
Simon said '...They are still victims and don't deserve to have a fraudster take their money..."
a hardworking, mature adult, with normal intelligence and normal education AND standards that frown upon the 'love of money', in its many forms, would probably decline to become an investor. For each one taken in by greed there are many who refuse. Did they deserve it? No, of course not. No citizen behaving legally deserves to suffer from a crime. Would a few well chosen questions and comments, at the right time, have dissuaded them from investing? A good chance.
This may be a good lesson for us to SPEAK UP AND PROTECT OUR FAMILY AND FRIENDS when we see them in financial danger.
I think the Dills were a prominent JW family 35-40 years ago in W. Washington. . . Name is odd and very familiar. I seem to remember a round, bald headed man, but that could just be a visual that seems to go with the name.
LogCon: Blondie asked ' ...why did they trust her?'
All she had to do was convince one Witness. Then is spreads like the ebola virus.
And that one person was Paul Cooper. A JW elder.
...he met Paul Cooper in 2006, a religious teacher and elder with a reputation as a financial rainmaker.
The word among the small network of Jehovah’s Witnesses in Mexico was that Cooper owned a spectacular home in Acapulco, funded charitable works and, if you were chosen, would share his gift.
“There was all this positive talk about him,” Titmas recalled.
So he was thrilled one day when Cooper approached him.
“I was given the chance to make a dream investment,” Titmas recalled. “He called me a special person … and said I had only a brief window of opportunity to invest.”
Cooper offered a chance to invest in a “successful” payday loan business in Spokane. Titmas took a few days to make some calls to trusted friends and religious peers.
“To the person, everyone that I spoke with had positive things to say about (Cooper),” Titmas said. “They were already invested and had good experiences.”
Titmas wanted the financial security, and saw the investment as an opportunity to offer financial assistance to his faith and enhance its missionary work.
There have been several "clawback" cases in which Bruce Kreigman has successfully received judgement against some of the investors who did make money on the scheme. The "net winners" had to pay back their fraudulent profits to offset the Little Loan Shoppe's bankruptcy.
I was able to find judgments for varying amounts against the following people/companies:Connie Konsulis, Shanna Bowolin, and Matthew Bowolin
Horst and Claudine Romani, H & C Investments, Ltd. and the Estate of Rene and Armande Baudez
Beverly Gyenizse, and David Perry Lazy M LLC, Pacifica Ventures Inc., Shelly Armstrong, David Armstrong, Daljit Haer, Ronald Ponton, and Tomika Ponton.
Keith Alexander ("Mr. Alexander") and 1127477 Alberta, Ltd.
The judge in these cases included this statement, or one similar, in the rulings:
"Defendants knew or should have known that Debtor was perpetrating a fraud"
They were greedy. And willing to take advantage of other JWs in order to increase their fraudulent profit.
It appears like 93 defendants had their cases withdrawn. https://www.gpo.gov/fdsys/granule/USCOURTS-waed-2_11-cv-00365/USCOURTS-waed-2_11-cv-00365-17At the bottom of the page at the link, there are more judgments and court actions listed.
Lorenz Reibling is listed as #6 in the list of creditors holding the largest 20 unsecured claims:
Lorenz invested 1.5 million dollars. And lost it all.
It appears like 93 defendants had their cases withdrawn.
Hmmm...it appears like I lost some of my post...
Among the list of those investors who had their cases withdrawn are Christopher, Matthew and Tim Reibling. Lorenz's boys.
I wonder how much the Reibling boys invested. Daddy/Uncle sure put in a chunk of change. 1.5 million Reibling dollars. Maybe he had some left over after his real estate deals with the WT.