Man Sentenced to 42 Months for Fraud Scheme
MADISON, WIS. -- Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that James Kolf, 64, Mauston, Wis., was sentenced yesterday by U.S. District Judge William Conley to 42 months in federal prison for wire fraud and money laundering. Kolf, formerly a registered securities broker and investment advisor in Madison, pleaded guilty to these charges on September 26, 2017.
During an interview with federal investigators, Kolf admitted that he began soliciting his investment clients in 2011 about a new investment, SFN Financial Network, which he represented would produce a consistent 6% rate of return. Kolf told his clients that SFN Financial Network would invest funds on their behalf in energy companies. In fact, SFN Financial Network was not a legitimate investment and Kolf did not intend to invest any of the funds given to him.
Between 2011 and 2016, fourteen individuals gave Kolf over $900,000 to invest into SFN Financial Network. During the course of the fraud scheme, Kolf provided many investors with purported account statements from their investments with SFN Financial Network. The account statements were fictitious and showed the investors’ supposed year-to-date profits and their supposed current portfolio balance. In addition, Kolf made Ponzi-style payments to some investors and stated that the money was interest income earned from their investment in SFN Financial Network.
Kolf ultimately used the money obtained from investors for his own personal gain, including buying a house, a car, and paying off various bills. In sentencing Kolf, Judge Conley stated that the fraud scheme was perverse given the trust that had been placed in Kolf by his investors.
The charges against Kolf were a result of an investigation conducted by IRS Criminal Investigation. The prosecution of the case has been handled by Assistant U.S. Attorney Aaron Wegner.