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One of them, 44-year-old Ponzi schemer James Nicholson of Bergen County’s tony Saddle River, was just sent to prison for 40 years, as more than four dozen jilted investors — including members of his own family — looked on.
Nicholson’s house also goes on the block — as does a Palm Beach apartment and a Time Warner Center condo in Manhattan — to help pay the victims. A receiver now controls Rockland County-based Westgate Capital Management LLC (CLICK HERE).
U.S. District Judge Richard Sullivan, in sentencing Nicholson in federal court in Manhattan, said he was amazed that Nicholson bought a $25 million mansion in the Hamptons at the same time he was destroying his investors’ lives to the tune of more than $140 million.
Federal authorities said Nicholson sent more than 250 customers bogus financial statements to try and cover up his crimes.
One of his victims — Nicholson’s own mother — pleaded for leniency, saying he had mental problems. But other investors testified that Nicholson stole their money for retirement or for their children’s college educations.
These followed letters to the judge:
“I have no money in the bank,” 82-year-old Brooklynite Josephine Esposito wrote. “I needed this money to live, pay bills and buy food … I now need to calculate how much money I have to spend on food each month.”
Another victim, Lorrraine Reilly, wrote: “Nicholson said that after Lehman collapsed, [his firm] Westgate had devastating losses and he panicked…. What Nicholson failed to mention in his pathetic attempt to make us feel sorry for him was that after he panicked, he bought a $25 [million] house in Southampton.”
Investigators discovered Nicholson’s crimes last year after investors — hearing of the Madoff ripoff — tried pulling back their money.
Two dozen of them got checks that all bounced. Investigators soon after arrested Nicholson at his upper Bergen County home on charges of securities fraud and bank fraud.
For his part, Nicholson said he played fast and loose but with good intentions, until the losses became so great that he had to cheat.
For instance: Westgate Strategic Growth Fund apparently was audited by an independent accounting firm. However, federal investigators discovered that “Havener & Havener” was actually a virtual company registered at a virtual address, paid for through Nicholson‘s VISA card and listing his personal address and phone number.
So this is what it has become: A series of supposed innocents who claim that greed turned them into criminals overnight.
Last year, federal regulators fined Robert Sucarato of New Jersey $1.2 million and ordered him to repay investors he scammed as the owner and president of a hedge fund firm that did its business online.
Now he’s facing criminal charges of cheating investors of $1.6 million (See: Feds insisting that finance ‘whiz’ remain in custody until trial).
In each case, the Bernard Madoff scandal was the lightning rod.
Madoff, 72, got 150 years in prison last year after losing billions of dollars of his clients’ investments. In the wake of that sentencing, other scammers have been flushed out.
And with them have come the sad stories of the victims, as Judge Sullivan noted.
“There are very few crimes of this magnitude that have caused this much pain,” he said.
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