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Charlotte man sentenced to twenty-two years for Ponzi scheme Defendant Previously Entered Guilty Plea to Securities Fraud and Mail Fraud CHARLOTTE, NC

FOR IMMEDIATE RELEASE
March 31, 2011

United States Attorney Anne M. Tompkins Western District of North Carolina

CHARLOTTE MAN SENTENCED TO TWENTY-TWO YEARS FOR PONZI SCHEME Defendant Previously Entered Guilty Plea to Securities Fraud and Mail Fraud CHARLOTTE, NC—Sidney S. Hanson, 63, of Charlotte, was sentenced today to 22 years in federal prison, to be followed by a supervised release term of 3 years, United States Attorney Anne M. Tompkins announced. In addition, Chief U.S. District Judge Robert J. Conrad, Jr. ordered restitution in an amount to be finalized within 60 days of sentencing, which is expected to be in excess of $33,000,000. Hanson has been in custody since his bond was revoked on February 25, 2010. Tompkins is joined by North Carolina Secretary of State Elaine F. Marshall, and Edward W. Montooth, Acting Special Agent in Charge of the Federal Bureau of Investigation, Charlotte Division, in making today’s announcement.

In July 2009, Hanson pled guilty to securities fraud and mail fraud. According to court documents, Hanson controlled Queen Shoals, LLC, and related entities in Charlotte. From about 2006 through 2009, Hanson and others solicited investments by falsely representing extraordinary rates of return with practically no risk of loss of principal by investing in Treasury bills, precious metals, and foreign currency. In reality, the overwhelming majority of the investor funds were invested in speculative business ventures. Investors were further deceived by receiving monthly interest payments, which came, in “Ponzi” scheme fashion, not from profits, but from new investments by other unwitting investors.

Over 100 victims of Hanson’s fraud appeared at the sentencing hearing. Ten victims, representative of the group, spoke to the court about the devastating impact of the scheme, describing the loss of life savings, feelings of betrayal, bankruptcy, loss of homes, being forced to come out of retirement at advanced ages, and the numerous impacts of the stress and anxiety caused by the loss of a lifetime of work on their mental states, marriages, and family relationships.

In pronouncing the sentence of twenty-two years, Chief Judge Conrad described how “heinous” the crime was, and stated there was no doubt that the defendant “utterly took advantage and preyed upon people.” Chief Judge Conrad also suggested that but for the defendant’s cooperation with the Government, among other factors, Hanson would have received an even longer sentence.

“My heart is with the victims,” said U.S. Attorney Anne Tompkins. “The damage caused by Hanson’s crimes goes well beyond the loss of material wealth,” Tompkins added. “If conscience will not deter fraudsters from taking advantage of the elderly and vulnerable, the certainty that justice is coming should.” “Since the day our securities investigators first raided the Queen Shoals offices we believed we had uncovered a major Ponzi scheme,” Secretary Elaine F. Marshall said. “What made this case even more sickening was that the scam was crafted to appeal to victims through their deeply held religious beliefs. I thank the Court for this verdict and our federal law enforcement partners for all their hard work to bring North Carolina investors a true measure of justice.”

“People invest their money with the hope of creating a better life for themselves. When you give your hard-earned income to someone who claims to be an expert, you trust that they’re honest. Our job is to make sure those fraudsters don’t prey on innocent people, that’s exactly what Mr. Hanson did,” said Acting Special Agent in Charge Edward W. Montooth. The investigation was conducted by the Federal Bureau of Investigation and the Securities Division of the North Carolina Secretary of State’s Office. U.S. Attorney Tompkins also acknowledges the invaluable assistance of the Commodities Futures Trading Commission. The case was prosecuted by Kurt Meyers and Mark Odulio, Assistant U.S. Attorneys from the U.S. Attorney’s Office for the Western District of North Carolina at Charlotte, and former Assistant U.S. Attorney Matthew Martens.


 

 

 

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