CHICAGO MAN SENTENCED TO 5½ YEARS IN FEDERAL PRISON FOR $2.6 MILLION INVESTMENT FRAUD SCHEME
CHICAGO – A Chicago man was sentenced to 5½ years in federal prison for cheating about 35 victims of approximately $2.6 million in an investment fraud scheme.
The defendant, ROBERT G. NELSON, offered and sold promissory notes, promising investors substantial returns, and instead used the money to pay earlier investors and for personal expenses.
Nelson, 40, who pleaded guilty to mail fraud last December, was sentenced yesterday to 66 months in prison by U.S. District Samuel Der-Yeghiayan. He was ordered to begin serving his sentence on Sept. 17, and the judge also ordered him to pay $2.643 million in restitution.
Nelson admitted that between January 2006 and the middle of 2008, he fraudulently obtained more than $6 million from investors by selling promissory notes personally and through his companies,
- F.C. Financial, Inc.
- Future Capital Financial Inc.
- RGN Investment Group
He falsely promised that the notes were a safe and secure investment, and that proceeds from the sale of the notes would be used to purchase real estate and make investments that would promptly generate a high interest rate, sometimes as high as 45 percent within three months. He then used the money he obtained to pay earlier investors and for family expenses.
“Again and again, Nelson persisted in his scheme, assuring desperate investors that in exchange for one more investment, he would pay all of the monies that investor was owed. He thus fueled his fraud with more lies and false representations,” the government argued at sentencing.
In 2007, the Illinois Department of Securities prohibited Nelson and his companies from offering or selling promissory notes. The criminal investigation began after he violated the state order by continuing to sell promissory notes into the middle of 2008.
The sentence was announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois. The investigation was conducted by the U.S. Postal Inspection Service in Chicago and the Illinois Secretary of State’s Securities Division.
The government was represented by Assistant U.S. Attorney Kaarina Salovaara.
The case falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement, who working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: www.StopFraud.gov.