S.F. man is sentenced to 4 years in 2-decade Ponzi scam
82-year-old also is required to pay $5M victim restitution after pleading guilty to fraudulently taking $14.2M from 45 investors
ALBUQUERQUE — An unregistered Santa Fe investment adviser dubbed a “mini-Madoff ” by his victims was sentenced Tuesday to four years in federal prison for securities and wire fraud tied to a Ponzi scheme that played out over two decades.
Douglas Lien, 82, also will have to pay nearly $5 million to 23 living victims who requested restitution and serve three years of probation after his release, a U.S. district judge in Albuquerque ordered.
“I took a road I should never have taken,” Lien said in court Tuesday. His family and friends were shocked by the “low level” he stooped to, he added.
Lien pleaded guilty in August to one count of securities fraud and four counts of wire fraud.
Between 2000 and 2019 he took in $14.2 million from 45 investors, according to previous reports in The New Mexican. Eighteen early investors made money with Lien, but roughly two dozen others are owed about $5 million.
U.S. District Judge David Herrera Urias said he took into account Lien’s age and medical issues — including bladder cancer, diabetes and heart disease — but he couldn’t look past the “monumental betrayal” the defendant imposed on his clients.
He agreed to Lien’s voluntary surrender in 60 days.
Lien’s attorney, Hans Erickson, said his client didn’t have any comment on his sentencing.
Federal prosecutor Timothy Vasquez also declined to comment.
Lien has been compared to infamous
financier Bernie Madoff, now deceased, who was jailed for swindling investors out of billions of dollars.
In 2021 the U.S. District Court ordered Lien to pay nearly $10.4 million in restitution and civil penalties. The federal consent order also prohibited him from making any commodity futures transactions on behalf of anyone.
His case began when victims approached the Securities Division of the New Mexico Regulation and Licensing Department in 2019, and the agency issued a cease-anddesist order against Lien. The state prohibited Lien from providing investment advice in New Mexico, from committing investment fraud here or soliciting or accepting funds to invest on behalf of someone else.
The Securities Division forwarded the case to the Commodity Futures Trading Commission, which prosecuted Lien in federal court.
For Lien’s victims, Tuesday’s sentencing brings an end to what they say were his fraudulent activities.
Among the victims was Randa Phillips, who said in court Tuesday that Lien still owes her thousands of dollars. She told Herrera Urias she’s known Lien for about 20 years and had gotten other friends involved with him and regrets doing so.
“This has been such a wound to my soul,” she told the judge, adding she “totally, totally trusted” Lien before finding out he was, in fact, defrauding her.
She added Lien has “no regard for anyone but himself and his family.”
Amy Elizabeth, who’s now-deceased mother, Norma Bell, also was defrauded by Lien, sent a victim statement to The New Mexican — which was read in court Tuesday — that says her mother tried to recover money stolen by Lien until her death in December 2022. The statement called Lien a “predator.”
“This man should not be able to live his final years in a manner that he stole from so many people,” the statement says. “He stole the life savings of many people, many elderly and infirm women, without any remorse. He intentionally preyed upon them and must be punished for that.”
Lien, who did business through his name and also Westend Investments, engaged in a Ponzi scheme by paying off early investors with money from subsequent investors without investing the money, according to court documents.
In the August plea agreement, he acknowledged he had “siphoned off millions of dollars” of investors’ funds “to pay my own personal expenses and expenditures.”
Lien also admitted in the plea agreement he had “devised and executed a scheme to defraud investors by means of false and fraudulent promises, pretensions and representations regarding an opportunity to invest in and trade commodities futures.”