Ponzi Scheme Promoter Gets 15-Year Term

Joel D. Nelson, the jaunty Hollywood Hills promoter accused of bilking investors out of about $20 million, was sentenced in Los Angeles this morning to 15 years in a federal penitentiary.

Nelson, 50, who had remained a fugitive for 2 1/2 years before his arrest last June in San Antonio, Tex., pleaded guilty four months ago to five of the 35 mail-fraud counts filed against him by a federal grand jury in December, 1982.

U.S. District Judge Consuelo B. Marshall sentenced Nelson to five year’s imprisonment on three of the counts to which he had pleaded guilty, with the sentences to run consecutively.

Restitution Ordered

She sentenced him to consecutive 5-year probation terms on the two remaining counts, with the condition that--to the degree that he is able--he make up to $8 million restitution to the victims of his phony insurance premium refinancing scheme.

With time off for good behavior and time already served, Nelson probably will serve a total of about five years in prison, prosecutors said.

Assistant U.S. Atty. Dean B. Allison said Nelson worked his scam--essentially a pyramid, or “Ponzi” scheme--for more than 13 years, making it “perhaps the longest-running investment fraud ever prosecuted.” Nelson is accused of bilking more than 500 people across the nation, many of them elderly couples who lost their life’s savings.

Marshall said that in recent months she received more than 100 letters from victims, some of whom demanded that Nelson “be incarcerated for life.”

After leaving the courtroom this morning, several of the victims said they were disappointed.

Jerry Mendelson, 72, who figured he lost about $20,000, called the 15-year imprisonment “exceedingly light.” Gary Willett, 69, who estimated his losses at about $56,000, agreed.

But Sid Levy, 62, who set his loss at $169,000, took a more philosophical view.

“I think it was just about as good as we could expect,” Levy said.