A Filipina-American nurse from Dallas, Texas was sentenced last week for orchestrating a Ponzi scheme that cost victims — many of whom were also Filipino nurses — over $1 million.
Nemelee Liwanag Jiao on Wednesday, September 5, was sentenced by a federal judge to eight years and a month, plus three years of supervised release for devising a Ponzi scheme that cost at least 35 “investors” about $1.9 million.
Jiao, originally from San Fernando, Pampanga, Philippines, was indicted in May 2017 for wire fraud, and pleaded guilty last December 2017. Her sentencing comes five months after it was scheduled to happen in April.
The scheme dated back to February 2009 and continued through September 2016 with Jiao convincing people to invest in promissory notes supposedly issued by two nonprofit schools, Shepherd’s Light Learning Center and Lord of Peace Learning Center, which are located in the in the cities of San Fernando, Pampanga and Santo Tomas, Pampanga in the Philippines.
The accumulated money instead went towards Jiao’s own personal benefits and expenses like country club memberships.
The schools reportedly did not know that their names were being used in her scheme.
According to the 10-page indictment, Jiao falsely told investors that she was a representative of Shepherd’s Light and Lord of Peace, and lured individuals into making investment contracts while promising investors return rates of 10 percent to 100 percent on investments.
Jiao also promised her victims repayment of principal and interest resulting from the investment within 30 days to one year following the investment. Jiao also went as far as having many of the investment contracts notarized in attempt to make them appear legitimate.
The indictment also said that the investors were directed to write checks and wire funds to bank accounts that were controlled by Jiao.
In persuading investors to maintain their investments, Jiao’s tactics included persuading them to invest additional funds, and falsely blaming Shepherd’s Light and Lord of Peace for lack of payment of interest and principle, despite knowing that the school was in no way involved.
The case was investigated by the Federal Bureau of Investigation. Following her sentencing, Jiao was sent to an all women federal prison camp in Bryan, Texas.
The U.S. Securities and Exchange Commission (SEC) defines a Ponzi scheme as an investment fraud, involving “the payment of purported returns to existing investors from funds contributed by new investors.”
According to the SEC, Ponzi scheme fraudsters — similar to those of pyramid schemes — focus on attracting new money to make promised payments to earlier investors or participants to make it seem like they are profiting from a legitimate business.
Some warning signs include high investment returns with little or no risk, overly consistent returns, unregistered investments, unlicensed sellers, secretive/and or complex strategies, issues with paperwork, and difficulty receiving payments.