DENTON (CBSDFW.COM)- Dozens of North Texas families found their retirement accounts empty after falling victim to a multi-million dollar Ponzi scheme.
Over the course of nearly two decades, federal prosecutors said James Nix and his son, Bradley, defrauded more than 40 victim investors of at least $6 million.
The two men, who ran a small accounting firm from a home in Lewisville, Texas, said they promised their tax clients high interest returns of up to 10% if they invested in their business.
However, federal investigators said James and Bradley Nix instead used the money to pay for luxury homes, vehicles and vacations.
In April, James Nix, 73, was found guilty of federal fraud and money laundering. He faces up to 20 years in prison and his sentencing is scheduled for this summer.
Bradley Nix, who testified against his father, pleaded guilty to federal fraud and was sentenced in May to 54 months in prison.
Many of the victims testified in federal court that before they learned the truth, they considered James Nix a friend.
“We had no reason not to trust him,” said Kathy Cousins, who, along with her husband, knew James Nix and used him as her personal accountant for more than a decade before she began investing with him.
The Cousins lost more than $200,000 in the Ponzi scheme.
“We’re blue-collar workers, but we save and save so we can have a really nice retirement and help our grandkids through college and do some traveling,” Cousins said.
For 18 years, the cousins invested with Nix. It wasn’t until their first attempt to withdraw money from her retirement account that they realized there was a problem.
The newly retired couple were heading out on a cruise to celebrate when James Nix told them they had no money.
Recalling the conversation, Ken Cousins said: “I called James and he said, ‘I don’t have the money and I’m not giving you anything either, so while you’re on the cruise, you might as well just jump over the rail and kill yourself. That’s exactly what he said. Then I knew it was a scam.”
According to federal prosecutors, James and Bradley Nix also defrauded the Cousins’ legally blind teenage daughter of nearly $8,000. The cousins said her daughter had turned to James Nix for investment advice on the money she was saving for college. She had earned the money washing dishes at a fast food restaurant.
In federal court, prosecutors mapped out how James and Bradley Nix spent the money they took from victim investors to lease luxury homes in Georgia, Idaho, Maryland, Connecticut, Washington, North Carolina and Colorado.
Prosecutors in court said the two also used the money to buy a Land Rover and a Maserati.
The funds were also used to pay for travel, including a weekend in a suit at the St. Regis Hotel in Atlanta at a cost of $14,000, according to court records.
The CBS 11 I-Team contacted attorneys for James and Bradley Nix. Both declined to comment.