Ponzi victims seeking restitution and donations
Investigators try to round up stolen funds
He may be no Bernie Madoff, but James U. Dodge of Springfield still managed to scam dozens of people across central Illinois out of almost $1.8 million. And even though Dodge was convicted of two counts of mail fraud in connection with his Ponzi scheme and sentenced to 63 months in prison, some of his victims say the story isn’t over yet.
“Not by a long shot,” says Theodore Fifer, a retired surgeon from Effingham who lost money in the 73-year-old Dodge’s scheme. Fifer watches as the U.S. Attorney for the Central District of Illinois works to reclaim money Dodge spent and parceled out to a handful of investors while others got nothing. [See “Ponzi on the prairie,” by Rachel Wells, Nov. 4, 2010.]
But Fifer says waiting for the feds to track down money that may have disappeared forever simply isn’t enough. Fifer and other victims are creating a nonprofit organization that will collect donations to reimburse those who lost money in Dodge’s scheme. Fifer says the group is “doing everything by the book” in the interest of transparency – something he says Dodge didn’t do. The group, named PrairiePonziVictims.org, is currently seeking approval from the office of the Illinois attorney general, which regulates nonprofits.
While Dodge represented to his victims that he was investing their money using an “algorithm” that supposedly allowed him to predict the stock market, he was really using new investors’ money to pay interest to previous investors, court documents show. Dodge did actually try his hand at investing, but between 2005 and 2008 he lost more than $353,000.
In total, Dodge accepted more than $5 million from investors, paid out about $1.8 million in “interest,” and apparently spent the rest. Court documents show Dodge used his ill-gotten gains to pay for month-long vacations in Naples, Fla., a different car every year, a rented house on Springfield’s west side, and tuition for his grandson to attend a private military academy. In the meantime, he didn’t report the money on his taxes, and he violated state law by acting as an investment advisor without a license, according to court documents.
Even after federal agents executed a search warrant in his home in February 2010, Dodge continued to defraud investors. Court documents show that Brian Moore, a neuropathologist in Springfield, helped investigators obtain a telephone recording of Dodge admitting to his scheme after Moore was bilked out of thousands of dollars.
Moore, who is helping Fifer create the nonprofit group, said many of Dodge’s victims were elderly retirees, and one victim was a paraplegic veteran scammed while lying in a veterans hospital bed.
“The impact of the loss on him is tremendous,” Moore said. “This is not about ‘Damn it, I want my money back.’ There are people who lost less money than Dr. Fifer or myself, but who were impacted even more dramatically than we have been. I really feel like Dr. Fifer is being altruistic in this.”
Fifer said the U.S. attorney has gathered more than $35,000 so far from some of the 14 victims who actually gained money from the scheme. That represents less than two percent of the $1.79 million Dodge gave to investors as “lulling payments” to keep them from becoming suspicious. The names of those 14 investors who made money from the scheme have not been made public.
Fifer says what angered him the most is that Dodge used $160,000 in apparently ill-gotten gains to pay for his grandson’s boarding school tuition, and Fifer believes that money cannot be recouped through the courts. He wants Dodge’s son, James W. Dodge of Springfield, to repay the money voluntarily.
“With no provable involvement of the attorney son James W., the convict Dodge structured this benefit to his grandson in a way (that is) not only tax-free, but as an ‘intangible,’ cannot be clawed back either in civil or criminal court,” Fifer said. “Pretty good for a 73-year-old baby food salesman with no advice from an attorney like his son.”
James W. Dodge said he could not comment on the case without consulting his attorney.
“I understand people are hurting,” he said. “This process isn’t done. My heart goes out to all of them.”
Contact Patrick Yeagle at email@example.com.