Scared Monkeys Discussion Forum

Ex-Northwoods resort owner gets 9 years for bilking investors

A former Northwoods resort owner who was convicted of stealing more than $3 million from nearly 60 investors in a Ponzi scheme has been sentenced to nine years in federal prison.

   Jeffrey D. Stadelmann, 47, who operated the Big Bear Hideaway in Boulder Junction and shared a $2 million home in Vilas County with his girlfriend, Donna Lonzo, persuaded the investors including friends and family members to put substantial sums into his company but wound up netting proceeds by taking out second mortgages on their properties.

   Assistant U.S. Attorney Scott Campbell  and Stadelmann's attorney recommended a sentence of seven years and four months in prison, but U.S. District Judge Rudolph Randa said that wasn't enough time and sentenced Stadelmann to nine years.

"It is a dark place you have gone. You put a lot of people through hell," Randa told Stadelmann.

Randa sentenced Lonzo, 44, who had a lesser role in the fraud, to one year and one day in prison. The judge ordered Stadelmann to pay $3.2 million in restitution. Lonzo's restitution was set at $2.1 million. Both defendants received three years of probation after their prison sentences.

"He has not only taken my money, he has taken my golden years," said 66-year-old Leroy Wegener, who said he has to continue working after Stadelmann took his investment funds. He said he had been friends with Stadelmann for 20 years before the fraud.

Stadelmann apologized to the victims, making the unusual move of standing and facing them from the defendant's table in the courtroom.

"I hope in time the tremendous hurt will be lessened and replaced by forgiveness," he said.

According to the plea agreement, Stadelmann's fraud started in 2002 and stretched into 2008. A former insurance salesman, he persuaded former clients, friends and family to make investments. Sometimes he used investors' money to pay off other investors or he simply pocketed the funds. He also directed investors toward businesses that secretly paid Stadelmann kickbacks.

The case was investigated by the criminal investigation division of the Internal Revenue Service.

"The perpetrators of financial fraud schemes can hide for a time behind false representations, too good to be true investment stories and straw buyers," said Jay Van Kirk, acting special agent in charge of the IRS Criminal Investigation St. Paul, Minn., field office, which covers Wisconsin. "As Mr. Stadelmann's sentence shows, his time has now run out and it is time for him to face his judgment."