Sauk Valley News, March 14, 2007 (Joseph Bustos)
A dozen local clients of former investment broker Nevin Gillette filed eight suits against him Tuesday in Whiteside County court, and 21 more are pending, their attorneys said.
All told, about 30 suits involving 35 investors will be filed within the month, seeking compensatory damages in excess of $6 million, as well as unspecified punitive damages, interest and fees, attorney John Burke said.
The St. Charles attorney and his partner in the Gillette case, Andrew Stoltmann, of Chicago, expect to file five more suits Monday, Burke said. The pair also have taken over the case of Judith A. Kness, of Chadwick, who filed a $1.3 million lawsuit against Gillette in October.
Whether the cases will be heard together or separately will be up to the judge, Burke said.
“I know I lost a lot of money, and I’m hoping I recover it,” one investor, Ernest Deetz, of Sterling, said Tuesday.
Burke and Stoltmann also believe there are eight other Gillette investors whom they are not representing and who also were victims of his nine-year scam, Burke said.
Investment companies ProEquities, based in Alabama, ING Financial Partners Inc. based in Minnesota, First Heartland Capital Inc., based in Missouri, and Locust Street Securities, based in Iowa, are named as co-defendants.
Gillette worked for them as an independent broker, and the lawsuits allege they did not properly oversee him or audit his practices.
Gillette did not return a message left Tuesday at his Sterling home.
Gillette, who has been indicted in federal court for mail and wire fraud in a case involving yet another client, has been accused of scamming more than 40 clients out of $8 million over at least nine years. The Illinois Securities Department has revoked his broker’s license.
Gillette owned Diversified Financial, Executive Marketing Services and Insurance Design of Illinois, as well as Team Supreme, which was involved in fishing contests. He worked the businesses out of an office at 1600 First Ave. in Rock Falls.
According to investigators, Gillette convinced people to invest in bogus “guaranteed investment certificates” or “trust” accounts. He took their money but never invested it, although he would send them statements showing the value of their investments, investigators said.
According to two of the complaints filed Tuesday, Gillette allegedly convinced investors to liquidate legitimate investments with Lincoln Benefit Life, which cost them taxes and fees, and never invested the money.
In October, a Wisconsin federal court ordered Gillette to pay $370,500 to former investor Dorothy Nickel, whose civil lawsuit triggered the investigation into Gillette.
He has pleaded not guilty to the federal fraud charges, filed in relation to Nickel’s case.
According to investigators, Gillette allegedly sent a letter to two people in Forreston, which included an allegedly fraudulent account statement, resulting in the mail fraud charge.
The wire fraud charge was filed because Gillette allegedly took money from the two and, rather than invest it, wired it to Wisconsin to pay Nickel.
If convicted of both charges, he faces up to 40 years in prison, a fine of $500,000, twice the amount he gained or twice the amount the victims’ loss, whichever is the greatest. His next court date is March 30 in Rockford.
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