Jetpack-Peddling Ponzi Schemer Faces Prison, Deportation

A Utah man who perpetrated a massive Ponzi scheme that caused nearly $7 million in losses was sentenced to a 5-year prison term - after which he will face deportation back to his native Great Britain.  John S. Dudley, 59, received the sentence from U.S. District Judge Robert J. Shelby after previously pleading guilty to a single count of wire fraud.  While wire fraud carries a maximum term of twenty years per count, Dudley's plea agreement included a recommendation by prosecutors for a five-year term. Dudley, a citizen of Great Britain, is expected to face deportation after serving his sentence.  

According to authorities, Dudley began pitching a variety of investment programs to potential investors as early as 2007.  These investments, including forex trading, mining speculation, and even a human jetpack rocket suit, were touted by Dudley at investment club meetings also known as "bounce nights" or "Tashi group meetings."  Investors were told that they could expect monthly returns ranging from 5% to 10%, that Dudley had not suffered a trading loss since 1978, and that their investments were protected from potential loss by a "senior life settlement policy."  Additionally, even if investors were low on available funds for investment, Dudley coached them on how to extract money from financial institutions through loans on houses or boats.  In total, Dudley raised more than $12 million from approximately 100 investors from January 2007 to March 2010.

Not surprisingly, Dudley's promises of steady and significant returns were possible only through perpetrating an elaborate Ponzi scheme that used new investor funds to repay older investors.  Instead of using investor funds for the various ventures he pitched, Dudley used investor monies for a variety of personal expenses including more than $2 million for the purchase of two homes, a down payment for a ski boat, and travel expenses.  After he was arrested in mid-2011, Dudley initially pleaded not guilty.  He later agreed to plead guilty in March 2013 to a single count of wire fraud.  

As part of his plea agreement, Dudley has also agreed to pay $6.8 million in restitution.