Minnesota Man Who Offered $19 Million For 1-Year Sentence Instead Receives 30 Years For Role In $194 Million Ponzi Scheme
A Minnesota businessman convicted for his role in a $194 million Ponzi scheme who tried a variety of tactics to obtain a light sentence - including offering a $19 million check and begging the sentencing judge for mercy - was ultimately unsuccessful as a Minnesota federal judge sentenced him to a thirty-year term. Jason "Bo" Beckman, one of the major players in Trevor Cook's massive Ponzi scheme that defrauded nearly 1,000 people, received the sentence after a federal jury convicted him of 18 counts that included mail fraud, wire fraud, and conspiracy to commit money laundering. Two of Beckman's co-conspirators, Gerald Durand and Christopher Pettengill, also were sentenced, while a third, Patrick Kiley, was scheduled to be sentenced before accusing his attorney of misconduct.
Along with Cook, the men operated Crown Forex SA and JDFX Technologies, which they represented could achieve risk-free and tax-free returns through currency trading. Potential investors were told that the above-average returns were possible due to the fact that the source of his loans complied with Islamia sharia law and thus could not charge interest. Cook used the men to pitch the scheme to potential investors, as both Kiley and Durand hosted successful radio talk shows. Indeed, Kiley alone brought in nearly two-thirds of the total investors. Beckman used his money-management firm, Oxford Private Client Group, to solicit affluent clients. In total, Cook and his associates raised nearly $200 million from over 700 investors. Yet, only $104 million was used to trade currency, of which $68 million was lost. The remaining amounts were used to pay investor returns and fund the personal and business expenses of the schemers.
The morning of the sentencing was spent reviewing defense attorneys' motion for a new trial after prosecutors alleged that Durand and Pettengill had previously discussed murdering Beckman in order to collect on a life insurance policy. United States District Judge Michael Davis denied that request. The court then heard from numerous victims of the scheme, many urging the maximum sentence for the defendants.
Beckman was sentenced first, but not before he spoke for nearly an hour, often choking up and continuing to deny any knowledge of the scheme. He lambasted the lack of evidence used to convict him, and intimated that he would gladly join those wrongfully convicted of crimes. His wife also testified, imploring Judge Davis to tread lightly in delivering his sentence and instead allowing Beckman to continue his search for the missing cash. Judge Davis had little patience for the acts, remarking that Beckman's grandstanding proved that
"some people should not have access to the English dictionary. You have used the English language to do violence to so many. It is not a gun. It is worse than a gun."
Assistant U.S. Attorney David MacLaughlin also weighed in, observing that "Mr. Beckman is the worst white-collar defendant in the history in the District of Minnesota." Beckman was then sentenced to serve a thirty-year prison term. One co-defendant, Gerald Durand, received a twenty-year sentence. Another, Christopher Pettengill, who has been cooperating with the prosecution since pleading guilty several years ago, was sentenced a 7.5-year term. Judge Davis indicated that, if not for Pettengill's cooperation, he too would have received a 20-year sentence. Beckman's attorney indicated he would appeal the sentence.
Kiley was also scheduled to be sentenced, with his attorney seeking a lenient sentence due to Kiley's age and medical maladies. However, when Kiley took the stand, he claimed that he had never been shown his pre-sentencing report - a document prepared by the U.S. Probation Office that detailed the crimes and calculated a recommended sentencing range. Additionally, Kiley accused his attorney of attempting to gain from his representation through various internet postings describing his representation of Kiley. Following this, Judge Davis indicated he would replace Kiley's attorney with a public defender and continue sentencing until a later date.
Ironically, the admitted mastermind of the scheme, Trevor Cook, received a 25-year sentence in August 2010 after pleading guilty and will serve less time than Beckman. With credit for good behavior, Beckman could be released in 2037.
A copy of Pettengill's plea agreement is here.
A copy of Durand, Kiley, and Beckman's indictment is here.