Retired Pharmaceutical Sales Representative Charged in Alleged ‘Ponzi’ Fraud Scheme
Springfield, Ill. – A Springfield man, James U. Dodge, 71, turned himself in to federal law enforcement authorities this morning and made his initial appearance in federal court on a criminal complaint that charges him with mail fraud for allegedly operating a “ponzi” fraud scheme. Dodge, of the 4800 block of Johanne Court, appeared before U.S. Magistrate Judge Byron G. Cudmore and was released under home monitoring provisions. During today’s hearing, Dodge indicated he may need a public defender, and a preliminary hearing was scheduled for April 29.
The criminal complaint alleges that Dodge is continuing to engage in a pattern of making false statements and submitting fraudulent information to obtain money from individuals in the guise of ‘loans’ or ‘financial investments.’ The affidavit alleges that Dodge, a retired pharmaceutical sales representative, portrays himself to others as a “day trader” of “futures.” According to the affidavit, Dodge is not registered as a broker or as an investment advisor with the Illinois Secretary of State, Illinois Securities Department.
According to the affidavit filed in support of the criminal complaint, Dodge promised individuals who lend or invest with him a rate of 3% “interest” or “return” per month for a “guaranteed” 36% return annually. Instead, the affidavit alleges that Dodge used funds from new “investors” to make “returns” on earlier loans or investments. Through the beginning of February 2010, the affidavit alleges that Dodge had received approximately $5.1 million in principal from individuals for investment purposes.
The affidavit also alleges that Dodge commingled “investor” funds in bank accounts which were being used for his personal expenses including rent for his residence, to finance the purchase of an automobile each year, a month-long vacation to Naples, Florida each year, and to make lulling payments to his clients.
Agencies conducting the investigation include the Internal Revenue Service - Criminal Investigation; Illinois Securities Department, Illinois Secretary of State’s Office; the Federal Bureau of Investigation; and the U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorney Patrick D. Hansen.
If convicted, the offense of mail fraud carries a maximum statutory penalty of 20 years in prison and a fine of $250,000.
Members of the public are reminded that a complaint is merely an accusation; the defendant is presumed innocent unless proven guilty.
James A. Lewis
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