Westgate Capital Founder’s 40-Year Prison Sentence UpheldPatricia Hurtado
Westgate Capital Management LLC founder James Nicholson, who pleaded guilty to defrauding investors including his parents, lost a bid to have his 40-year prison sentence overturned.
Nicholson pleaded guilty in 2009, admitting he lied about stock trades, investment returns and the amount he had under management. He said he controlled $50 million to $60 million, while telling investors he had $900 million under management, prosecutors said.
At Nicholson’s October 2010 sentencing, U.S. District Judge Richard Sullivan rejected pleas for leniency, giving Nicholson just five years less than the U.S. had sought. Defense lawyers had sought 10 years. The judge today said Nicholson couldn’t challenge the penalty because it fell within the range set out in his plea agreement.
“The devastation left in the petitioner’s wake was, and remains, staggering in its scope,” Sullivan said in today’s ruling. Nicholson’s victims “were by and large not sophisticated investors, they were, instead, middle class and working class people who trusted petitioner to invest their life savings -- accumulated as a result of decades of work and frugality.”
Sullivan cited the harm Nicholson’s “brazen” crimes inflicted on his victims. The judge said the fraud cost investors more than $150 million.
“Each of the 250 victims suffered profoundly as a result of petitioner’s deviousness, but several are worth mentioning for the sheer callousness, bordering on cruelty,” the judge said.
One victim, a widow in her 80s, lost her life savings and now subsists on a reverse mortgage, even after Nicholson assured her relatives the investment was sound, the judge said. Another lost his savings, pension, retirement and college funds, and home after Nicholson had assured him his investment was “safe.”
Andrew Frisch, a lawyer for Nicholson, didn’t immediately return a phone call seeking comment about the ruling.
The case is U.S. v. Nicholson, 09-cr-414, U.S. District Court, Southern District of New York (Manhattan).