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Man enters plea in fraud case
Anderson was himself a victim of fraud, his attorney says
derek anderson
Derek Matthew Anderson, 51, makes his initial appearance May 20 in Green County Circuit Court on four Class H felony charges. - photo by Marissa Weiher

MONROE — A Milton man entered a deferred prosecution agreement June 18 in a felony fraud case alleging he scammed an elderly rural Monroe resident in a financial scheme.

Derek Matthew Anderson, 52, pleaded no contest in Green County Circuit Court to one Class H felony charge of willfully violating Wisconsin Uniform Securities Law.

Two additional counts were dismissed. The charges were filed as part of an amended complaint. He originally faced four Class H felony counts of making misleading statements or omissions in connection with securities trading.

Judge James Beer withheld sentencing, and Anderson entered a three-year deferred prosecution agreement. The charge he pleaded to will be fully dismissed if he complies with the agreement.

According to the criminal complaint, the victim was an 82-year-old woman who lived northeast of Monroe in the Town of Sylvester. In 2016 and 2017 she wrote four checks totaling $160,000 for investments solicited by Anderson at her home.

She has since died.

Anderson was previously fined by state regulators for scamming investors and was under an order not to sell investment securities when he failed to tell her the risk involved in her investments, court records show.

But Anderson was himself a victim in the financial scheme and “operating under the auspices of another individual,” his defense attorney, Michael Torphy, said at the deferred prosecution agreement hearing June 18.

That individual, 48-year-old Jace T. McDonald of Montello, is a self-proclaimed “profit enhancement consultant” and the author of “The Soul of Success, Volume 2” and “How Fast Do You Want Your Money?” McDonald has an open felony case in Marquette County that alleges he participated in securities trading fraud.

Torphy noted Anderson lost about $25,000 of his own money as a result. He said Anderson is a licensed insurance agent and has not had prior issues.

The criminal complaint against Anderson describes how he played a small role in a much larger operation. The complaint is authored by Jeffrey Hole, securities examiner for the Wisconsin Department of Financial Institutions Division of Securities.

In May 2015, the Division of Securities issued a cease-and-desist order against Anderson for using “false and misleading” techniques to sell life settlement interests to at least five Wisconsin investors while independently contracted with Conestoga Life Settlements.

Puerto Rico-based Conestoga has been disciplined for securities fraud in Wisconsin and in other states, including Colorado, where the securities commissioner there described the company as “running a multi-level marketing scheme.” According to its website, Conestoga “no longer offers life settlement participations to new investors” and the business appears to be defunct.

In September 2016, Anderson was fined $10,000 as part of a final order by the Division of Securities related to his Conestoga sales.

But he continued soliciting investments, in violation of the order, according to court records.

The victim told Division of Securities staff that she met Anderson through her insurance agent and that Anderson would visit her and bring her gifts and at one point even brought his wife out to meet her.

She said she purchased investments through Anderson into oil and gas offerings and into Woodbridge Mortgage Investment Fund offerings.

Woodbridge targeted seniors nationwide with a “massive” billion-dollar Ponzi scheme while owner Robert H. Shapiro and his family “lived in the lap of luxury and spent exorbitant amounts of investor money in alarming fashion,” according to a lawsuit filed against the company in 2017 by the U.S. Securities and Exchange Commission. Woodbridge has since declared bankruptcy.

In October, Shapiro was sentenced to 25 years in prison after pleading guilty to financial crimes related to swindling millions of dollars out of thousands of investors nationwide.

In 2016, through Anderson, the victim invested about $100,000 into Woodbridge. Anderson received nearly $5,000 from Woodbridge as his commission, in addition to $3,000 in commissions for other investments she made.

The state Division of Securities fined Anderson in August 2018 for his sales to the woman, while also ordering him to “disgorge any and all commissions, profits or other monies received.”

According to the August 2018 order, Anderson gave her a business card identifying himself, falsely, as an attorney, registered investment adviser and certified public accountant.

He also failed to inform her of the risks involved in her investments and the regulatory actions taken against himself and Woodbridge, the order states.

“She told Division staff she would not have made the investments had she known,” Hole wrote in the criminal complaint.