I-Team: Lewisville accountant sentenced to 48 years in prison for Ponzi scheme

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SHERMAN, Texas (TSWT) – A 74-year-old accountant in Lewisville was sentenced Thursday by a federal judge to 48 years in prison for carrying out a multi-million dollar Ponzi scheme.

Over the course of nearly two decades, federal prosecutors said James Nix defrauded more than 40 victim investors out of at least $6 million.

“You hurt so much, this is all I can do for the victims,” ​​U.S. District Judge Amos L. Mazzant said when he sentenced Nix to life in prison.

Nix, who ran a small accounting firm from a home in Lewisville, promised his tax clients a high-interest return of up to 10% if they invested in his company.

However, federal investigators said that instead of investing the money, Nix spent the money on high-end vehicles, luxury vacations and to rent mansions across the country.

Ken and Kathy Cousins, who lost all of their retirement savings in the scheme, said they considered Nix a friend when they started investing with him more than 20 years ago.

“We had no reason not to trust him,” says Kathy Cousins, who, along with her husband, knew James Nix and used him as their personal accountant for over a decade before investing with him.

“We’re workers, but we’ve been saving so that we can have a really nice retirement and help our grandchildren with some study and some trips,” said Kathy Cousins.

For 18 years, the Nix cousins ​​trusted their savings. It wasn’t until their first attempt to withdraw money from their retirement accounts that the Dentons realized there was a problem.

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The newly retired couple were on a cruise to celebrate when Nix told them they had no money.

Reflecting on the conversation, Ken Cousins ​​said, “I called James and he said, ‘I don’t have the money and I’m not going to give you any money, so while you’re on the cruise ship, you might as well just jump the railing and commit suicide.’ That’s exactly what he said. I knew then it was a scam.”

According to federal prosecutors, Nix also defrauded the cousins’ legally blind teenage daughter out of nearly $8,000 dollars. The cousins ​​said their daughter had gone to Nix for investment advice for money she was saving for college. She had made the money by washing the dishes at a fast food restaurant.

During the sentencing hearing, Judge Mazzant noted that Nix never took responsibility or showed remorse.

Nix declined to give a statement at the hearing and made no eye contact with any of his victims because they addressed him directly with their impact statements.

“He didn’t even want to look at us,” Ken Cousins ​​said after the hearing. “He didn’t even have the decency to look at us — no awareness, no regrets, nothing.”

Nix’s lawyer declined to comment.

In April, Nix was found guilty of federal fraud and money laundering.

His son, Bradley Nix, who testified against his father at the trial, pleaded guilty to federal fraud for his role in the Ponzi scheme and was sentenced to 54 months in prison in May.

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Nix’s defense asked for a similar sentence for James Nix, but the federal judge said the roles were different, calling the elder Nix the “leader” of the operation.

In federal court, prosecutors charted how James and Bradley Nix spent money they stole from victim investors to rent luxury homes in Georgia, Idaho, Maryland, Connecticut, Washington, North Carolina and Colorado.

Prosecutors in court said the two also used the money to buy a Land Rover and a Maserati.

According to court records, funds were also used to pay for travel, including a weekend in a suit at the St. Regis Hotel in Atlanta, amounting to $14,000.

Investment fraud complaints have risen 400% since 2019, according to the FBI.

FBI Supervisor Robbie Manson said it is “despicable” how much greed they see in their investigations.

Manson said that in most cases, even if they catch the fraudster, victims rarely get their money back.

“I think it’s important to remember that these plans are driven by greed, and they often blow the money within a few years,” he explained. “If that happens, it will be very difficult for us to get those assets back for the victims.”

Here are some red flags of many Ponzi schemes, according to the U.S. Securities and Exchange Commission.

  • High investment returns with little or no risk – Every investment carries a certain amount of risk, and investments that produce a higher return tend to carry more risk. “Guaranteed” investment returns or promises of high returns for little risk should be viewed with skepticism.
  • Overly consistent returns – Investments tend to go up and down over time, especially those looking for high returns. Be suspicious of an investment that generates consistent returns regardless of general market conditions.
  • Mysterious and/or complex strategies and fee structures – It’s a good rule of thumb to avoid investments you don’t understand or can’t get full information about.
  • Difficulty receiving payments – Be wary if you don’t receive payment or are having trouble paying out your investment. Ponzi scheme organizers sometimes encourage participants to “roll over” promised payments by providing a higher return on investment.
  • It comes through someone with a shared affinity – Fraudsters often abuse the trust gained by being a member of a group that shares an affinity, such as a national, ethnic, or religious belief. sometimes respected leaders or prominent members can be brought in, knowingly or unknowingly, to spread the word about the ‘investment’.
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