Leader of Van Nuys-Based Ponzi Gets Seven Years in Prison

A Los Angeles man, who fled the country after the collapse of a $7.6 million Ponzi scheme that targeted his fellow Rotarians, was sentenced today to seven years in federal prison and ordered to pay $2.8 million in restitution to his victims.

Daniel Nelson Tynon, 55, was also ordered by U.S. District Judge Stephen V. Wilson to serve three years of supervised release after getting out of prison.

Tynon, who operated a Van Nuys-based investment company called Dant Corp., pleaded guilty last October to mail fraud.

He falsely promised investors annual returns of 18 percent, with the income coming from investments in county property tax liens, according to court documents. Postal inspectors who investigated the case found no evidence that Tynon invested in tax liens, according to the U.S. Attorney's Office.

About 40 victims invested a total of almost $8 million with Tynon. Many of them were members of the Rotary International service organization, where Tynon was a former district governor.

"This Ponzi scheme is a classic example of affinity fraud, in which the fraudster preys on victims who are members of an identifiable group, exploiting the trust and friendship of the group's members," B. Bernard Ferguson, Inspector in Charge for the Los Angeles division of the United States Postal Inspection Service, said previously.

"The victims suffered not only a financial loss, but also -- perhaps even greater -- the violation of the trust they had placed in a respected leader of their organization," he said.

After the Ponzi scheme collapsed early last year, several investors received information that led them to believe that Tynon had died, but postal inspectors investigating the matter determined that Tynon was  alive and living in Thailand.

After federal prosecutors filed charges against Tynon, his U.S. passport was revoked based on the outstanding mail fraud arrest warrant and he was apprehended by the Royal Thai Police, Immigration Bureau, and was escorted back to the United States.

During the course of the scheme, which started about a dozen years ago, Tynon raised just over $7.6 million, but some victims were partially repaid and the estimated losses in the case were just shy of $3 million, according to the U.S. Attorney's Office.

—from City News Service