Promoter Nelson Gets 15 Years in Investment Fraud

Joel D. Nelson, the jaunty Hollywood Hills promoter accused of bilking investors out of about $20 million, was sentenced Tuesday to 15 years in federal prison.

Nelson, 50, who remained a fugitive for 2 1/2 years before his arrest last June in San Antonio, had pleaded guilty four months ago to five counts of mail fraud in exchange for an agreement that 30 other counts be dropped.

U.S. District Judge Consuelo B. Marshall sentenced Nelson to five years in prison on each of three of the counts to which he had pleaded guilty, with the sentences to run consecutively. She sentenced him to consecutive five-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 about five years in prison, prosecutors said.

13 Years of Fraud 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 savings.

After watching the courtroom proceedings Tuesday morning, several of the victims said they were disappointed.

Jerry Mendelson, 72, who figured that he lost about $20,000, called the 15-year prison sentence “exceedingly light.” Gary Willett, 69, who estimated his losses at about $56,000, agreed, saying that it “should have been more.”

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

On the Run “I think it was just about as good as we could expect,” Levy said. Nelson vanished from his extravagant mansion above Hollywood on New Year’s Eve, 1981, taking his secretary, Donna Santiago, 34, with him.

Prosecutors said Nelson and Santiago fled to Mexico, then to El Paso, and finally to San Antonio, taking about $120,000 that the flamboyant entrepreneur had managed to salvage from his crumbling financial empire.

In December, 1982, a federal grand jury in Los Angeles indicted Nelson on 35 counts. Last June 6, shortly after dawn, FBI agents surrounded the comfortable suburban home where Nelson and Santiago had been living and arrested them without incident. Santiago, held 24 hours as a material witness, was not charged.