If you take $1.2 million in investor money, then spend less than $400,000 on the project and “refund” the rest to yourself, at some point you are likely to run into some complaints. That is just what happened to James C. Nistler yesterday, when he was convicted for racketeering, securities fraud and aggravated theft by a County Circuit Court jury in Medford, Oregon[1]. Nistler collected money from “about a dozen elderly investors” for the project. He was not licensed, nor were the securities he was selling registered.
Nistler is a former “high ranking official” with the U.S. Department of Housing and Urban Development. He worked with HUD in the late 1980s. He proposed to use the funds to create a housing development called Tennessee Acres. Overall, about $800,000 were lost in the scheme[2]. Nistler will be sentenced December 9.
It took the jury less than a day to convict Nistler of “an elaborate Ponzi scheme,” though his attorney claimed that the developer is simply “a victim of high hopes and poor timing”[3]. The lawyer argued that the housing development was not an “evil Ponzi scheme,” but actually a failed real estate deal. He emphasized that Nistler lost his own money when the subdivision failed. However, Nistler advertised high rates of returns on short-term investments when he was soliciting money for the project, and then used the money to pay off “old, massive encumbrances on the properties.” The debts had been created by Nistler earlier in the development process when he paid himself “unwarranted fees and refunds.”
While it sounds like James Nistler erred in multiple ways and probably was not operating above board, does the fact that the failure of the development ultimately led to the lawsuit concern you?
Thank you for reading! Your comments and questions are welcomed below – and be sure to click “Like” if you’ve enjoyed this article.
[1]http://www.columbian.com/news/2010/nov/17/ore-developer-convicted-in-real-estate-scheme/
[2] http://kdrv.com/page/195369
[3]http://www.mailtribune.com/apps/pbcs.dll/article?AID=/20101117/NEWS/11170322/-1/NEWSMAP
If you aren’t careful about how you conduct yourself and business, could be an uh-oh. First tip off to investors should have been: former “high ranking official” with the U.S. Department of Housing and Urban Development. Do you trust the Gov’t ?
Could not agree more with Mel! What part of “high ranking official” did not set off red flags and alarm bells for everyone. Most likely need to go back to his job and see what other criminal activities he was involved with!
we were a victim of an investment scam involving commercial acreage in austin tx. The fbi told us that since it was only a milion dollars, they
really dont have the resources to investigatge. the scamer has since scamed a couple other elderly people. the scamers name is stephen lyons
he did let his texas real estate license go at least.
http://www.realestateinvestorgordon.com
I agree with both Mel and Patriot. It is likely that most of our future criminals will be coming from government jobs. It’s apparent by today’s administration that that’s what politicians are learning, how to be criminal. Indict them all, lock them up and throw away the key. I can’t believe what they have done to our country and to our private sector. We the people have to stop it.
I can’t get the statement, “I’m with the government and I’m here to help” out of my mind. Can’t figure out why, though. Geez, if the theft and corruption just amongst our “Leaders” were prosecuted we could eliminate more than half the national debt, just with the penalties and profits these thugs have negotiated for themselves.
Previous poster comments are all excellent arguments in favor of term limits, meaning that all elected officials and the political hacks they appoint should be limited to two terms: the first in office, the second in jail……
with this kind of nonsense happening … I am amazed anyone would want to own their own business anymore!!!!!!!
Back in 1998, I was living in Dallas, Tx. living my dream life-married, two boys, custom-built 6200 sq. ft. home in a suburb outside Dallas-Plano, Tx.
I made money in the medical business, then switched to buying houses from HUD, rehab, and selling within ninety days! Had three crews working
for me, my dream life completed! Then my wife started offering outrageous returns to elderly people doing a “ponzi scheme” type operation!
I told her to quit-she refused, so I left! Went to the Feds, cooperated with them, she got indicted, convicted, and spent three years in federal
prison; my reward for all this was total destruction! Lost my home (SEC got it), lost my business, lost my $3,000,000 dollar line of credit from
three major banks in Dallas, and had three little boys to support and take them to prison every month to see their mother!
Excuse was “mommy was in a hospital getting well”! Watch out for the roads you take, and who you take them with; the one sleeping next
to you may be the enemy who destroys the embodiment of your being an important entity of life!