Kirksville Man Sentenced on Federal Fraud Charges

ST. LOUIS, MO—Neal A. Jackson was sentenced to 30 months in federal prison for defrauding 23 investors out of more than $844,000, Acting United States Attorney Michael W. Reap announced today. In addition to his prison sentence, Jackson was ordered to pay restitution of $844,591.

According to court documents, Jackson started an investment brokerage business called The Money Tree (TMT), located at 705 North Green Kirksville, Missouri. Additionally, Jackson started a company called Gestalt Group, LTD, (GG), which maintained post office boxes in St. Charles and Kansas City Missouri, but was operated from his business in Kirksville. Through these entities, Jackson defrauded a series of investors through the operation of a Ponzi scheme, where returns to investors were paid through monies paid by later investors.

The scheme began soon after Jackson realized in 1990 that GG was not going to be a viable entity. GG was created when Jackson became involved in a multi-level marketing program that involved water and air filtration systems and was the entity through which he intended to sell these systems. Even after Jackson realized that GG was not going to be a profitable endeavor and ceased in his attempts to sell the systems, he convinced individuals in the course of his operation of TMT to invest in GG through an investment vehicle he called “certificates.” Through these certificates, he led investors to believe that their principal investment was secure, scheduled interest payments and described an investment in GG. None of these representations were true. As part of the scheme to defraud, Jackson utilized investor funds to pay his personal expenses, to pay previous investors and to make unauthorized trades in stocks and options. Jackson hoped to eventually make enough money on the unauthorized trades to recoup all his losses and to repay investors. However, Jackson lost money on the majority of the unauthorized trades, resulting in the collapse of his scheme. Through the operation of this scheme to defraud, Jackson received approximately $1.4 million from 26 individual investors and defrauded these investors out of approximately $844,000.

NEAL A. JACKSON, Kirksville, Missouri, pleaded guilty June 30, to one felony count of mail fraud, and appeared today for sentencing before United States District Judge Jean C. Hamilton, in St. Louis.

Reap commended the work performed on the case by the Kirksville Office of the Federal Bureau of Investigation and Assistant United States Attorney Matthew Schelp, who handled the case for the U.S. Attorney’s Office.