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Man gets 24 months for bilking investors

Citizen Staff Writer



A securities and insurance broker in Green Valley who admitted operating a Ponzi scheme was sentenced to 24 months in prison followed by three years of probation, the Internal Revenue Service said.

Michael A. Dawes pleaded guilty in 2007 to mail fraud and money laundering.

He admitted getting about $4 million in loans from 80 investors between 1998 through 2006.

He promised them a rate of return of 10 percent to 30 percent for investments he said he would make in an offshore account, documents in the case stated.

Instead Dawes used the money from new investors to pay old investors, according to a plea agreement with the U.S. Attorney’s Office.

“Dawes did not tell his clients the ‘investment opportunity’ was fictitious and did not exist,” court documents stated.

“By primarily using new investors’ funds to pay old investors, Dawes operated a fraudulent scheme,’ his plea agreement stated.

The estimated loss to investors over the eight years of the scheme was $1.7 million.

Investors paid Dawes directly to make investments on their behalf.

The scheme began after Dawes lost money speculating in the options market, according to the plea agreement.

Ponzi schemer gets two years in prison, three on probation

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