Manitowoc man James Nickels indicted after creating $3 million Ponzi scheme

MANITOWOC - A federal grand jury in Wisconsin's Eastern District has indicted 67-year-old James Nickels of Manitowoc on 18 counts of wire fraud and one count of money laundering.

The indictment states that from September 2006 to August 2017 Nickels ran a scheme that made materially false representations, omissions and promises to entice people to invest in a business known as The Fiscal Concierge.

During the scheme, Nickels failed to let potential investors know he used money from new investors to pay interest and principal promised to previous investors and to pay his own personal expenses.

More than $5 million in proceeds were collected in the scheme and the investors' net losses totaled $3,193,616.

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“Investment schemes can destroy the dreams of victims whose hard-earned savings are stolen," United States Attorney Matthew Krueger said. "We commend the excellent work of the IRS and the State of Wisconsin in joining forces to investigate this case.”

Each of the 18 wire fraud charges committed by Nickels carries a possible penalty of up to 20 years in prison and fines up to $250,000. Meanwhile, the money laundering charge is a possible penalty of up to 10 years in prison with a fine that could reach $250,000.

The defendant is presumed innocent until proven guilty as an indictment is only a charge.

This isn't the first time Nickels has been in trouble for his business practices with The Fiscal Concierge. In December 2016, Nickels was ordered by the state Department of Financial Institutions to pay $3.6 million in restitution to investors.

The order revealed Nickels, uncle to Manitowoc Mayor Justin Nickels, had sold promissory notes to at least 35 investors and none of the notes had been registered with the state Division of Securities.

The document stated: "Division staff analysis of Fiscal Concierge's bank records and business records show that the company has never been a profitable business at any time and that Nickels and Fiscal Concierge have never been able to make principal or interest payments to earlier investors without an infusion of additional money from another investor or investors."

Gregory Anderson, an accountant with Ihlenfeld, Skatrud & Anderson, Inc., in Manitowoc, was also named in the DFI order as being involved with the various violations. Anderson was fined $25,000 for the solicitation of at least 27 of his own clients to invest in Fiscal Concierge.

Anderson filed a petition for judicial review with the Manitowoc County Circuit Court in February 2017 asking to reverse the DFI's order. That petition was denied later that year.