Two Perryville financial advisors sentenced to more than a decade in prison for $5.7M Ponzi scheme
FOX23 News at 9 p.m.
CAPE GIRARDEAU, Mo., (KBSI) — Two southeast Missouri men have been sentenced to more than a decade in federal prison for operating a nearly 20-year Ponzi scheme that defrauded at least 99 victims of $5.7 million.
U.S. District Judge Stephen N. Limbaugh Jr. on Friday sentenced James “Jim” Johnson, 78, to 188 months in prison and Darrell Niswonger, 69, to 150 months. Both were also ordered to repay their victims. The men pleaded guilty in August to wire fraud, securities fraud and investment adviser fraud. Niswonger also pleaded guilty to four additional counts of wire fraud.
Prosecutors said Johnson and Niswonger ran Johnson & Niswonger Financial Resources LLC in Perryville, promising clients that their investments would be placed in safe, tax-free municipal bonds with a 5 percent return. Instead, investigators found they used much of the money to support lavish personal lifestyles, including country club memberships, golf tournament sponsorships, home improvements, educational expenses for a relative and annual salaries of $195,000.
The scheme began in 2006 after the firm encountered cash-flow problems. According to plea agreements, the pair continued to solicit money while knowing they could not repay investors, urging clients to roll over investments and discouraging withdrawals.
Victims included friends, relatives, neighbors, teachers, factory workers, farmers and even a fund used to maintain a Ste. Genevieve County cemetery. In letters to the judge, victims described losing retirement savings, inheritances, home sale proceeds and the ability to buy housing or pay rent.
“Niswonger and Johnson’s scheme victimized teachers, factory workers, truck drivers, farmers, a rancher, a waitress and even one of their own employees,” U.S. Attorney Thomas C. Albus said. “Their victims weren’t investing for luxuries, but to provide for their families.”
Acting Special Agent in Charge Christopher Flowers of the FBI St. Louis Division said the men “exploited and defrauded members of their community for personal gain,” adding that he hopes the sentencing brings some closure.
The U.S. Postal Inspection Service assisted in the case, emphasizing efforts to protect the integrity of the mail system, which was used in aspects of the scheme.
Johnson and Niswonger also agreed to forfeit $301,749 from the sale of Johnson’s home, a 2019 Audi A5 Premium, $61,734 in bank accounts and $53,588 in brokerage accounts.
The FBI and U.S. Postal Inspection Service investigated. Assistant U.S. Attorney Gwendolyn Carroll prosecuted the case.
