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Thursday, March 31, 2011 04:09 am

Dodge gets five years for Ponzi scheme

Schemer’s son: ‘Father suffers from great delusions of grandeur’

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James U. Dodge

Awaiting last week his sentencing to five years and three months in prison, James U. Dodge, a man once described by his former friends as exuberant, lively and inviting, sat still and stone-faced in his courtroom chair, moving only a thumb as he kneaded the back of his folded hands.

The 72-year-old man’s fate had already been all but sealed as his defense lawyer and the prosecution described to Judge Richard Mills an agreed recommendation for a 63-month prison sentence, payment of $1.79 million restitution and six years of probation as punishment for the Springfield-based Ponzi schemer. James U. Dodge was also ordered to pay at least 50 percent of his monthly disposable income into the restitution fund for victims. From 2004 until his arrest in April 2010, James U. Dodge, a retired pharmaceutical sales representative, convinced 66 people, many of them friends and fellow retirees, to “invest” through his special “algorithm” that he guaranteed would produce 3 percent monthly returns. While many “investors” rolled-over their returns, others cashed out regularly, unknowingly receiving money paid in by other “investors.” [See “Ponzi on the prairie,” Nov. 4, 2010].

James U. Dodge’s public defender, Thomas Wilmouth, during the hearing acknowledged that victims see his client as a “predator” and a “con-man,” but he rebutted: “I submit, more accurately, he was and remains delusional. While not a defense in the case, it is a reality.”

It’s a theme repeated by James U. Dodge’s only son, James W. Dodge, a lawyer for the Illinois Senate Democrats, who submitted a letter to the court on March 16. In the letter, James W. Dodge describes his father as suffering “from great delusions of grandeur … not owing to age, as my father is still sharp, but are a part of his personality that has been around a long time, though not previously acted upon to the degree it was here.”

In a letter from Nancy Bunchman, James U. Dodge’s wife until they divorced in 1990, she describes Dodge’s slow transformation from the “honorable man” that she married, to a pharmaceutical representative who traded samples and merchandise with pharmacists for items in their stores, such as shampoo and cough medicine. Bunchman writes of James U. Dodge’s envy of a wealthier friend from high school and his attempts to find investors for oil well drilling deals.

James W. Dodge calls his father a “restless, unfulfilled, manipulative opportunist” but adds that if he were “to obtain that pot of gold” he felt was available to him, that James U. Dodge would “give, give, give, as he gave to me, my wife and son during this scheme.”
Though satisfied with James U. Dodge’s sentencing, victim and Springfield doctor Brian Moore says he’s still unhappy with the younger Dodge, who he feels should return the money his father gave him. James W. Dodge and his family were named in a September plea agreement as the beneficiaries of $160,000 that James U. Dodge gained as part of his scheme. Moore, a friend of James U. Dodge’s until investigators exposed the scheme, says James U. Dodge used the money to pay for his grandson’s boarding school in Indiana. “An honorable man would have insisted that his grandson be pulled from that school in order to provide some restitution to victims, but you are not an honorable man. You are a scoundrel,” Moore said to the elder Dodge at the sentencing.

James U. Dodge issued an apology to victims at the hearing, but Moore says it lacked sincerity and one victim stood and turned his back to Dodge’s words.

Though 52 of Dodge’s 66 investors lost money totaling $1.79 million, the remaining 14 victims gained money, which prosecutors have asked they voluntarily return. So far, five victims who profited have returned a total of less than $33,000. Asked whether the government would press civil charges to obtain gains from the other victims who profited, prosecuting attorney Patrick Hansen says, “We will take every legal step we can.”

Contact Rachel Wells at rwells@illinoistimes.com.

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