Gillette ordered to pay out $370,500
|
| Nevin Gillette |
BY JOSEPH BUSTOS
SVN REPORTER
jbustos@svnmail.com
Sauk Valley investment broker Nevin Gillette, accused of running a nine-year, $8 million, Ponzi scheme, owes former investor Dorothy Nickel more than $370,500, a federal court has ruled.
The default judgment was lodged against Gillette when neither he nor his counsel appeared in court in Madison on Oct. 10. Gillette had attempted to settle the case before it went to trial, by wiring more than $354,000 to Wisconsin - a transaction that is now the basis for a federal wire fraud charge lodged against him.
Nickel, formerly of Rock Falls, her daughter and son-in-law rejected his settlement in part because they were not satisfied that there was adequate documentation to show that that was the amount she actually was owed, court records show.
According to federal court documents, Gillette used money from two other investors to try to settle the Nickel lawsuit. He had told them that he was investing the money for them, court records show.
The case led to an Illinois Securities Department investigation, and the federal charge.
Gillette's attorney in the Wisconsin case, Mike Van Sicklen, withdrew as defense counsel because he was having difficulty contacting Gillette in the weeks leading up to the trial, Van Sicklen said.
His firm, Foley and Lardner, also was concerned that Gillette would not be able to appear for the trial because of the criminal charge pending in Rockford federal court, and because he is behind on payments to the firm, Van Sicklen said.
Nickel's son-in-law, Dennis Klemm, said Nickel has not yet received any money from the
settlement.
According to Klemm, Nickel's husband, Bert, went into the a nursing home in 2005. When his Medicare ran out, the family tried for six weeks to get in touch with Gillette, so they could withdraw money from their account. The broker did not respond. Klemm's attorney then tried to unsuccessfully for five weeks to contact Gillette, Klemm said.
On Jan. 11, Dorothy Nickel filed suit. Gillette waited the full 90 days allowed to respond to the suit, then his attorney asked for an extension to prepare a defense, Klemm said.
The Nickels had invested roughly $250,000 with Gillette over the last 20 years, and when Gillette attempted to settle, he thought the family would drop the suit, Klemm said. They did not, because they didn't know about the tax consequences and where the money had been, he said.
If convicted of wire fraud, Gillette faces 20 years in prison and a fine of up to $250,000, or twice the amount he gained or twice the amount the victims' loss, which ever is greatest. That investigation continues, and more charges are possible.
In addition, he faces at least $1.6 million in fines from the Illinois Securities Department for allegedly bilking 40 people out of about $8 million over the last nine years, by his own admission, state investigators say.
A message left at Gillette's home was not returned Monday. Gillette, who lives in Sterling and has an office in Rock Falls, owns Diversified Financial of Illinois Inc., Executive Marketing Services of Northern Illinois Inc. and Team Supreme, a fishing tackle business.
His broker's license was suspended by the state pending proceedings to permanently revoke it.
Reach Joseph Bustos at 625-3600 or (800) 798-4085, ext. 529.
Reach Joseph Bustos at 284-2222 or (800) 798-4085, ext. 529.
