Retired Pharmaceutical Sales Representative to Serve 63 Months in Prison for Ponzi Fraud Scheme

Ordered to Pay $1.79 Million in Restitution to Victims

SPRINGFIELD, IL—U.S. District Judge Richard Mills today sentenced James U. Dodge, 72, of Springfield, Ill., to a term of 63 months (five years, three months) in federal prison for operating a Ponzi fraud scheme that defrauded more than 50 victims over a six-year period beginning in 2004. Following completion of the prison sentence, Dodge, of the 4800 block of

Johanne Court

, was ordered to remain under supervised release for a period of six years. Dodge was ordered to pay restitution in the amount of $1,797,328 to the victims. Dodge was allowed to self-report to begin serving his prison sentence on a date to be determined by to the federal Bureau of Prisons.

On Sept. 2, 2010, Dodge pled guilty to one count each of mail fraud and money laundering. According to court documents and statements during court appearances, from at least June 2004 through April 2010, Dodge defrauded more than 50 investors of $1,000,000 to $2,500,000. Dodge admitted that he made false statements and submitted fraudulent information to obtain money from individuals in the guise of ‘financial investments.’ Dodge represented to investors that he used an “algorithm” to trade on the stock market, a system that he represented guaranteed him at least a 6 percent return or profit per month. Dodge further represented that he would split this profit with investors and they would receive payments of 3 percent of their investment each month, for a total 36 percent return per year. Some investors opted to receive this ‘return’ monthly in the form of a check while others opted to roll over their investment ‘return.’

According to court documents, Dodge is a retired pharmaceutical sales representative and is not registered as a broker or as an investment advisor with the Illinois Secretary of State, Illinois Securities Department.

Agencies conducting the investigation include the Internal Revenue Service - Criminal Investigation; Illinois Securities Department, Illinois Secretary of State’s Office; the Federal Bureau of Investigation; and the U.S. Postal Inspection Service. The case was prosecuted by Assistant U.S. Attorney Patrick D. Hansen.