Former Mission woman facing decades in jail for Ponzi scheme
Seventeen years after the Little Loan Shoppe opened its doors in an Abbotsford strip mall, the now-defunct business’s proprietor is facing decades in jail after pleading guilty to 110 criminal charges in connection with a massive Ponzi scheme.
Doris Nelson, a former Mission resident who now lives in Spokane, Wash., pleaded guilty earlier this year to 110 criminal charges in connection with an investment scheme she ran for more than eight years. An attempt to cancel the plea was denied in late July.
Nelson raised about $137 million from at least 650 investors from around the world. The U.S. government considers $35 million of that total “gross proceeds” obtained through the use of wire fraud, mail fraud and money laundering. Now, as Nelson awaits sentencing, American officials want that money back – even though Nelson’s company Little Loan Shoppe, filed for bankruptcy in 2009.
Mission lawyer Gordon Ruley said Nelson was a client of his for many years.
“I just wouldn’t have expected it from her,” said Ruley, who said he knows of at least four people in Mission who lost money in the scheme, including two who are his clients.
One of his clients invested $1.5 million, while another put in hundreds of thousands.
When asked about the possibility of them receiving any money, he said the chances were “zero.”
Nelson opened her first Little Loan Shoppe on South Fraser Way in Abbotsford in 1997. By 1999, she was collecting money from investors to open stores in Maple Ridge and Chilliwack. A Little Loan Shoppe was located on First Avenue in Mission starting in 1997, according to District of Mission business licence records, although that particular location isn’t mentioned in American court filings. Nelson moved to the United States with her new husband in 2001.
By the time she closed her Lower Mainland loan shops in the early 2000s, Nelson had begun taking telephone loan applications from Canadians. She expanded the business to the Internet in 2006, according to an American bankruptcy court filing.
The Ponzi scheme began in 1999, when Nelson first started using money from new and existing investors to pay for annual returns as high as 75 per cent, according to the U.S. Securities and Exchange Commission and the Federal Bureau of Investigation. Nelson said the money came from the store’s profits. But the businesses weren’t making money, according to the FBI.
“In contrast to her consistent representations, Nelson was operating a massive Ponzi scheme where investors’ individual returns were paid using their own investments or money paid by other investors,” the FBI said.
During the scheme, Nelson withdrew about $4.3 million of investor money and “funded a lavish lifestyle for herself and her family,” the FBI said. She spent $223,000 in upscale clothing stores in Las Vegas, Nevada, New York, Honolulu and Beverley Hills. She also lost more than $1.3 million gambling in Las Vegas.
The scheme began to collapse in 2008 and the Little Loan Shoppe was forced into bankruptcy the next year.
Nelson pleaded guilty in April, after rejecting a plea agreement. She later asked to retract the pleas, but a judge ruled against her in late July. The Spokesman-Review newspaper said an initial plea agreement would have sent Nelson to prison for 10 years. The newspaper said Nelson turned that deal down, but returned to prosecutors several months later, by which time the deal had been raised to 30 years.
Meanwhile, the American government is trying to take possession of money, vehicles – including a Mercedes-Benz, a Corvette, a Crownline boat and three snowmobiles – and more than 100 pieces of jewelry seized in 2010. The jewelry includes dozens of gold and diamond pieces, ranging from a 34-inch 18-karat gold designer necklace with diamonds, to an 18-karat white gold Rolex.