A California man entered a guilty plea to charges he masterminded an $8 million Ponzi scheme that masqueraded as a tax lien investment venture. Daniel Tynon, 55, pled guilty to a single count of mail fraud before United States District Court Judge Stephen V. Wilson, which carries a maximum sentence of twenty years in prison. Having originally fled to Thailand when the scheme collapsed, Tynon was later detained and extradited back to the United States when prosecutors charged him with fraud. Many of the victims are said to be members of the Rotary International service organization, where they knew Tynon through a previous appointment as district governor.
According to authorities, Tynon operated Dant Corp. ("Dant"), which held itself out as an investment company that specialized in the purchase of tax liens. State counties and municipalities often hold annual tax lien auctions where outside investors are allowed to "purchase" outstanding or unpaid tax liens, often at above-average interest rates. Purchasers are guaranteed that interest rate, and if the tax lien remains unpaid, have the possibility to take possession of the property. Tynon and Dant solicited potential investors by promising whopping annual returns of 18%.
However, a later investigation showed that neither Tynon nor Dant had purchased any tax liens on behalf of investors. Instead, investors had been part of an elaborate Ponzi scheme that re-distributed funds from investors purporting to be returns from profits. Authorities estimated that victims suffered a net loss of over $2 million.
Tynon is scheduled to be sentenced December 10, 2012.