MADISON – A Tomahawk woman who “systematically fleeced” $460,831 from 32 investor clients was sentenced Tuesday in federal court to four years and three months in prison and ordered to repay her clients.
Pamela M. Hass, 64, deserved “no leniency,” Assistant U.S. Attorney Daniel Graber wrote the court.
Between March 2007 and October 2013, Hass traded on her trust with friends and family members, taking some of their retirement nest eggs, to spend on herself and to fund her own bizarre investment schemes.
Hass falsely told clients she would invest their money in a pop-up Internet ad business that would double or quadruple their investment within a year.
When the time lapsed, investors complained about not getting paid. Some who threatened legal action, including pastor Ted Nelson, who Hass had met at a Wausau church prayer group, were repaid with other investors’ funds, said Graber. Hass continued to take and spend investor funds until her bank balances ran low, then went after more investors, said Graber.
“When she could have shut down the scheme … she continued it. … She never invested a penny of the clients’ money” in the investments she touted to them, Graber wrote.
Linda Bohnert of Tomahawk, who Hass befriended after Bohnert became a widow, testified Tuesday that she entrusted her $300,000 retirement account in 2005-06 to Hass, ultimately losing $100,000 of it.
“I have nothing … I went years without electricity. I sold all my jewelry. And I’m really sad because I loved Pam. I thought she was my friend,” Bohnert told District Judge James Peterson.
Graber explained that Bohnert lost her $300,000 retirement account through Hass’ mismanagement, which is not criminal conduct but it showed how Hass impacted her clients’ lives. Bohnert also gave Hass $6,600 to invest, which Hass used on personal expenses and that became part of the criminal case.
Hass had an investment and insurance business for 15 years, during which she became captivated by multi-level marketing programs, also known as, pyramid schemes. She spent more than $120,000 of her clients’ funds on the programs. She also spent $52,000 on her mortgage payments, $45,000 on debt collectors, $33,000 on property taxes and utilities, $6,486 on health care and $123,229 on miscellaneous expenses, according to her attorney Peter Moyers.
Unpaid investors complained to the FBI and Securities Exchange Commission, of which the latter began to investigate Hass. After being subpoenaed by the SEC, Hass fled the state in 2013, leaving behind her husband of 29 years, Larry Hass, who was suffering from Stage 5 prostate cancer.
Larry Hass had no idea where his wife went, as she only left him an “I’m sorry note,” according to court documents. After 28 months, Hass returned to Wisconsin and was charged and pleaded guilty to money laundering and wire fraud. Instead of repaying her defrauded clients, Hass purchased a home and acre of land near Ogema, Wisconsin, within days of pleading guilty last fall.
“She just doesn’t get it,” Graber told Peterson. Moyers said Hass joined tax protester and sovereign citizen groups, even becoming secretary of state of the Wisconsin Free State, which Moyers described as a “parallel government” that believes the U.S. government no longer follows the U.S. Constitution.
Moyers called his client “a prudent thief” who did not gamble the funds she misappropriated, or squander them on Bentley automobiles or other luxuries.
Instead, Hass believed there would be a “global currency reset” where the U.S. dollars would be replaced as the favored trading currency and those holding Iranian dinars would become wealthy, said Moyers. From this wealth, Hass believed she could repay her clients in full.
Hass declined to make a statement in court. Peterson set Hass’ restitution at $381,335, the unpaid balance she owes her former clients, and put her on three years’ supervised release to monitor her repayment activity. Peterson continued Hass’ release on conditions and will issue a later order telling Hass when to report to prison.