TERRE HAUTE —
Jason Severs, a Terre Haute man accused of running a Ponzi scheme to defraud victims out of more than $1 million, is facing up to 25 years in prison.
Judge Michael Lewis sided with the prosecutor’s request Friday and gave Severs 25 years, the maximum possible under a plea deal struck earlier this year. With good behavior, Severs could be out in 12 1⁄2 years, Lewis said.
As part of that deal, Severs, 39, pleaded guilty to one count of securities fraud involving people older than age 60, a class-B felony. He also pleaded guilty to selling unregistered securities and failing to register as a securities professional, both class-C felonies.
In a slightly broken voice, Severs answered “Yes” when Lewis asked whether he planned to appeal the sentence.
Severs’ defense attorney, Kathleen Sweeney, argued for a lighter sentence of six years. She said Severs, who was released on his own recognizance after spending 10 months in the Vigo County jail, had not fled the area despite facing a certain stint in jail.
“He could have run, and he didn’t,” Sweeney told Lewis. She also said Severs had not lived an extravagant life style and had sold his home to provide cash to begin to repay his victims.
“I don’t know what else you can do,” Sweeney said.
But Lewis didn’t buy those arguments, calling this “one of the most outrageous cases I’ve ever had before me.” He noted that many of Severs’ victims lost their entire life savings.
Prosecutors believe Severs’ overall scheme involved more than $3 million. However, based on bank documents uncovered in an investigation by the Indiana Secretary of State’s office, they settled on a more conservative figure of $1.37 million.
Severs, especially while in prison, is unlikely to be in a position to repay his victims, said Rob Roberts, chief deputy prosecutor. However, there are federal tax deductions for victims of Ponzi schemes, he said. Also, the Indiana Secretary of State’s office has a restitution fund that can repay victims up to $15,000, said Connie Lawson, Indiana Secretary of State, who was in Terre Haute Friday for the sentencing hearing.
The amounts victims lost to Severs ranged from $5,000 to more than $300,000, Roberts said in a news conference shortly after the sentencing.
Authorities became aware of Severs’ activities in 2011 when an Ohio woman filed a report with the Terre Haute Police Department, said Jason Saunders, deputy Vigo County prosecutor, also speaking during the post-sentencing news conference. She had made a $50,000 investment with Severs and had requested $10,000 back. She became suspicious after Severs was unable to pay her the money, Saunders said.
An investigation by Sgt. Pete Holvey of the Terre Haute Police Department and investigators with the Indiana Secretary of State’s office found that no money collected by Severs had been invested. Instead, the money was used for Severs’ personal expenses, such as car payments, his mortgage, credit cards, utilities and cash withdrawals. His credit card payments totaled approximately $200,000, Saunders said in the news conference.
Severs is originally from Sullivan County but had been living in Terre Haute at the time of his arrest. His scam targeted friends, family and acquaintances. Severs gave his victims the false impression he was a “sophisticated, international businessman,” Roberts said during the hearing.
Documents recovered from Severs’ home, from which he operated his scam, showed he was promising his investors rates of return as high as 22 percent.
Secretary of State Lawson, who sat in the gallery during the sentencing hearing in Division 6 court and took part in the post-sentencing news conference, said, unfortunately, such cases are not uncommon.
“It really isn’t that unusual,” she said, adding the well-known expression that if something seems too good to be true, it probably is.
Reporter Arthur Foulkes can be reached at 812-231-4232 or email@example.com.