On Nov. 4, 2014, in Spokane, Washington, Doris E. Nelson, of Colbert, Washington, was sentenced to 108 months in prison and three years of supervised release for committing tax fraud. Restitution will be determined at a later date. Nelson pleaded guilty in April 2014 to 110 charges related to wire fraud, mail fraud, and international money laundering. According to court documents, Nelson ran a fraud scheme for over eight years and took in approximately $137 million from at least 650 investors worldwide. Nelson operated an unprofitable payday and short-term lending business, known as the Little Loan Shoppe. She solicited hundreds of investors, throughout the United States and in international locations, by leading them to believe, falsely, that her business profits allowed her to pay investors a 40% to 60% (and up to as much as 75%) annual return. Nelson also made numerous false and fraudulent statements about the Little Loan Shoppe in order to induce investors. Rather than paying her investors returns from a profitable business, investors were paid “interest” with their own money or the money of other investors. Investor funds rarely, if ever, were used to fund new customer loans. The scheme collapsed in 2008, when the flow of new funds could no longer support the payments required on the earlier investments and Nelson abruptly announced that all investments would be changed to a 10% interest rate. Nelson ended most payments to investors around this time, and by February 2009 she suspended all payments. Nelson’s scheme resulted in personal withdraws of investor money of approximately $4.3 million. With these proceeds, she funded a lavish lifestyle for herself and her family.
On Nov. 3, 2014, in Topeka, Kansas, Jerold D. Fisher, of Arma, Kansas, was sentenced to 41 months in prison and ordered to pay more than $4 million in restitution for collecting false tax refunds. Fisher pleaded guilty to one count of filing a false federal tax return. According to his plea agreement, from 2006 to 2009, while Fisher was a registered agent for Fisher Alfalfa Farms, he prepared false federal tax returns both for himself and for his mother in order to receive tax refunds that were not owed to them. In 2006, he started to test the tax system by filing false income tax returns claiming Fisher Alfalfa Farms had withheld taxes from his wages and paid them to the federal treasury. As he continued to fraudulently receive tax refunds without being detected, Fisher increased the amount of his claims.
On Oct. 30, 2014, in Charlotte, North Carolina, Glen Adkins Jr., of San Diego, California, was sentenced to 300 months in prison and Warren F. Tonsing Jr., of St. Paul, Minnesota, was sentenced to 144 months in prison. Both were ordered to pay $2.4 million in restitution, joint with their co-defendants. Adkins and Tonsing were convicted in August 2013 of wire fraud and money laundering. According to court documents, the defendants defrauded United States residents, most over the age of 55, out of millions of dollars by deceiving them into believing that each had won a large monetary prize in a “sweepstakes contest.” Both defendants worked in a Costa Rica-based call center that used computers to make telephone calls over the Internet to victims in the United States. This process allowed the defendants and their co-conspirators to disguise the originating location of the calls. Victims were informed that the callers were from a federal agency and that to receive their “prize” they had to wire thousands of dollars to Costa Rica for a purported “refundable insurance fee.” As long as the victims continued to pay, the co-conspirators continued to solicit more money from them in the form of purported fees. To date, 46 defendants have been convicted for their participation in similar Costa Rican telemarketing schemes.