A fund manager whose customers inquired about their accounts after hearing about Ponzi king Bernard Madoff's fraud was sentenced to 40 years in prison Friday, and the judge said he could not understand why he bought a $25 million mansion in the Hamptons as he was ruining his investors' futures.
James Nicholson, 44, of Saddle River, N.J., showed no emotion as U.S. District Judge Richard Sullivan announced the sentence for his $140 million fraud in a courtroom packed with more than 50 jilted investors, including some of Nicholson's own family members.
Sullivan told Nicholson he had all the advantages in life, including "good looks, charm and charisma, and yet you used many of these qualities to victimize people whose only error was to trust in your judgment."
Prosecutors said Nicholson sent his more than 250 customers fraudulent financial statements between 2004 and February 2009. The fraud was discovered in early 2009 when some customers tried to retrieve their money after hearing about Madoff.
Madoff, 72, who has become an icon for greed and deceit on Wall Street, was sentenced to 150 years in prison last year after he revealed in December 2008 that he had failed to invest the money of his customers, losing billions of dollars for thousands of clients.
Nicholson cried during the more than two-hour proceeding only when his mother spoke on his behalf, saying he was "very sick and needs help" and that she too had lost money in the fraud.
Nicholson locked eyes with several of nine investors who spoke to the judge, telling him they had lost retirement money, college investments and for some, life savings that they entrusted to the man who was invited to speak at colleges and before philanthropic organizations that he supported.
When given the chance to speak, Nicholson said he had not excuse for his conduct, "just regret, remorse."
He said he felt shame for what he did, and he was sure it would never leave.
"My intentions were good," he said, noting that only after the money he had invested for his customers became losses did his actions become criminal.
Sullivan rejected a request by Nicholson's lawyer to sentence him to only a dozen years in prison, choosing instead to impose a sentence not far from the maximum 45 years that he faced.
The judge also ordered $140 million to be paid in restitution and $131 million in forfeiture, though the money no longer exists to satisfy either of the orders.
"This is a sad day," Sullivan said. "There are very few crimes of this magnitude that have caused this much pain."