NORWALK, Conn. – A Norwalk man pleaded guilty to operating a Ponzi scheme that defrauded investors out of more than $1.6 million, according to Deirdre M. Daly, U.S. Attorney for the district of Connecticut.
James E. Neilsen, 55, waived his rights to indictment and pleaded guilty to one count of wire fraud at a federal court in Hartford Thursday, Daly said. He is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on Dec. 22.
Neilsen had been operating a Ponzi scheme since at least 2006, according to court documents. His victims included his 93-year-old great aunt, as well a minor children beneficiaries of a trust established after their father’s death and whose trust monies Neilsen had authorized access to, according to Daly. Other victims included his accounting clients, clients of his tax preparation business, friends and members of his family.
Neilsen was a certified public accountant until he became inactive in 2012, according to court documents. While operating his scheme, Neilsen received more than $1 million from numerous people to invest in Ulysses Partners, LLC, an entity in which Neilsen was a partner and chief financial officer, or Neilsen Financial Services, an entity that Neilsen owned and controlled. According to Daly, Neilsen told investors that Ulysses Partners or Neilsen Financial Services would invest their money in businesses or business ventures, and promised a return of 9 to 10.5 percent. Instead, Neilsen used the money to pay back earlier victim investors or make personal expenditures, according to court documents.
Through the scheme Neilsen defrauded investors of $1,663,641.83, according to Daly. He was arrested on June 18, 2015 and was released on a $250,000 bond.
Neilsen faces a maximum prison term of 20 years. He has also agreed to pay restitution in the amount of $6273, 841.95, which includes additional monies owed to investors, according to Daly.
The case is being investigated by the Federal Bureau of Investigation, the Greenwich Police Department and the Connecticut Department of Banking. The prosecutor is Assistant U.S. Attorney David T. Huang.
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