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The Herald, Rock Hill, S.C., Andrew Dys Columnist column: Rock Hill Ponzi victim: 30 months isn't enough prison time for Sullivan [The Herald, Rock Hill, S.C.]

Apr. 18--Dimple Williams' son told her Gene Sullivan was a good man.

"Best reference there is," said Edna Williams, called "Dimp" or "Dimple" her whole life because of those dimples that haven't gone away at age 77.

And Dimp with the dimples wasn't always in a wheelchair, one lower leg cut off due to bad circulation, battling breast cancer.

The lady, retired from a job making Christmas ornaments, on her feet the whole shift, a factory where she worked overtime every hour she could get for 20 years, for decades gave Sullivan at New York Life in Rock Hill her insurance business and some annuities investments.

Sullivan would come to the little house on Columbia Avenue that Jimmy Williams and Edna bought decades ago for $5,000.

"Gene would talk 5, 10, 15 minutes; talk about money a minute, then ask about Mama, my sisters, family, try and make me comfortable," Edna Williams said. "He would do it every time. I didn't know then he was doing me dirty the whole time -- and a whole lot of other people, too."

Sullivan, 63, who had worked for New York Life in Rock Hill since 1976, was sentenced to 30 months in prison last week for a decades-long Ponzi scheme in which he scammed investors out of more than $2.5 million.

He was well-known and respected. He refereed sports and coached sports and went to church. He was used in training videos for other New York Life agents. He had more than 3,000 clients over 33 years with the company.

Then, in 1996, Edna recalled that Sullivan told her he had a great deal for her. He said so right there at her kitchen table, where she made the biscuits. Sullivan would sit, time and time again, asking about her mama and her health.

"He said the deal he would give me he would give nobody else," Edna recalled. "I said, 'Shoot.' Gene told me he had a guy who wanted to borrow money, and the guy would pay me 12 percent interest.

"Yeah, that person was Gene Sullivan himself, and he done me dirty and he done a whole bunch of old people dirty."

Edna told Jimmy nothing of the $9,000 special investment. He knew only about the regular insurance and annuities that had mailed statements every month, and policies with New York Life letterhead.

"I used to stash dollars in the sock drawer," Edna said. "I kept change in this big liquor bottle I bought at a yard sale for three dollars. One time that bottle had $400 in it when I changed it out for paper money at the bank."

In 2002, Sullivan brought up the idea again.

"I give him another $11,000," Edna said of giving Sullivan more money for guaranteed high interest.

Sullivan didn't give proper receipts, Edna said, and most times didn't give receipts at all.

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"He carried a yellow legal pad, and would do the figures, that's it," Edna said. "I never saw a dime. But I had always trusted Gene. Had no reason not to trust him."

Here's what court documents say Gene Sullivan did to a woman with breast cancer, an amputee in a wheelchair, named Edna "Dimp" Williams:

"Edna Williams paid $9,000 to Sullivan in return for an open-end Private Placement Promissory Note dated June 13, 1996, with terms providing for 12% interest, with interest-only payments of $90 per month beginning July 15, 1996. The Note had no maturity date, and was redeemable with 30 days notice. A subsequent amendment dated December 9, 2002, added $11,166.16 to the balance of the Note."

There is no such thing as a "Private Placement Promissory Note," say federal investigators, insurance investigators, and financial industry regulators who probed Sullivan's scheme. Those authorities say Sullivan did the same sort of thing with dozens of older clients, people who had lost spouses, friends for decades.

When he pleaded guilty in federal court on Wednesday, Sullivan admitted he would keep some money for himself, then pay more and more investors needed to keep the Ponzi scheme afloat.

Sullivan used the money for his own lifestyle -- leases for his children's cars, their college educations and weddings. The scheme started when Sullivan needed money to build his home, which is valued at close to a half million dollars. That house is now in foreclosure after Sullivan filed for bankruptcy once the scam was uncovered.

Although he benefited by more than $1 million from the scheme, he did pay back investors more than a million. He was charged with mail fraud -- the crime of using money orders sent through the mail to make some of those illegal payments on phony investments.

Another victim found out about the scheme in 2008 after asking Sullivan for financial records. Sullivan wrote the woman a phony receipt, prompting her to complain to New York Life. The company investigated, fired Sullivan, and paid back more than 30 people the $2.1 million that Sullivan stole -- including $26,176.03 to Edna and Jimmy Williams.

One victim Sullivan stole from, whom New York Life reimbursed more than $130,000, was retired Winthrop University music dean Jess Casey. Casey knew Sullivan for almost 50 years. The two were so close, Sullivan's son is named after Casey's son.

However, New York Life didn't have to pay Casey or Williams or anybody else, according to court documents and testimony. The company was a victim itself because Sullivan used his employment with them as part of his trap for investors.

Sullivan admitted all the criminal and civil charges in court proceedings, and admitted that New York Life knew nothing of the scam. New York Life paid off the investors, but the courts mandated that Sullivan owes his former employer the $2.1 million it paid out to those who were scammed.

Edna Williams did get more than $26,000 back from New York Life that she and Jimmy could document as having invested with Sullivan. But she also claims she gave him thousands in cash over the years -- sock-drawer money and liquor-bottle money and more that she had squirreled away, for which she received nothing. But she can't prove it because she has no paperwork.

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"He'd come right over here and sit at the table," Edna said of Sullivan. "Every time, he'd say, 'Honey, don't you worry about it. You will be taken care of for the rest of your life.'

"Well, he sure took care of it -- took it right into his pocket."

Sullivan admitted in court that he planned to die before paying people back for the money he stole, then let his own life insurance clean up the mess he made. He apologized to all investors for the first time publicly Wednesday in court, but hasn't spoken directly to Edna Williams since he was fired and arrested.

"The last time I talked to Gene, I asked him how much I had with him, and he said probably more than $100,000," Edna said.

Edna and Jimmy Williams still have several New York Life products and are happy with the customer service they have received on all other products besides the phony, non-existent products Sullivan sold Edna. The $100,000 figure could have included those legitimate investments, as well as the fraudulent investments that Edna made and Jimmy didn't know about until the scam Sullivan was running was halted.

"New York Life done right by us, just like they done right by all the others who got taken," Jimmy Williams said. "When this all broke, two of them from New York Life came to the house, and I showed them what I could find.

"Dimp was at White Oak, recovering after her surgery where they took her leg. About two weeks later, we had that check for the $26,000."

Edna has fought breast cancer and has survived five years. Her right leg was amputated below the knee around the time Sullivan's scam unraveled. Jimmy worked 26 years at the old Bleachery textile mill, then 20 more years as a security guard at River Hills. The couple survives on Social Security, the legitimate investments, and savings.

"I been a miser with money all my life; that's why I had it, because I saved it," Edna said. "I worked for my money, and Jimmy worked for his money. Gene Sullivan? He ain't done nothin' but steal from people."

Sullivan, who has not yet reported to federal prison, has lived at Hilton Head Island since last year and has denied repeated requests for interviews. Efforts to reach his lawyer for comment were unsuccessful last week.

When a defendant is released on bond after sentencing, the fed9eral Bureau of Prisons typically notifies him -- within 60 days -- when and where to report to begin serving his prison term, said Kevin McDonald, acting U.S. Attorney for South Carolina.

More than 60 friends and family of Sullivan attended Wednesday's court hearing. Some spoke of Sullivan's community service, generosity and loyalty, over almost 40 years. Those people are friends loyal to Sullivan, and Edna and Jimmy Williams said they understood that friends are loyal. They respected the loyalty of those people to Sullivan.

But loyalty doesn't explain a scam that went on for decades and victimized other people -- and only stopped when Sullivan was caught.

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Edna Williams said she was just as loyal as any other friends who told the court Gene Sullivan was an otherwise nice man. She was loyal with her business, and her money, and what she got in return was a knife in the back.

"All the good he done doesn't equal the bad he did," Jimmy Williams said. "Not just bad to us. A lot of people."

None of the victims who lost money to Sullivan -- including Sullivan's own brother and sister-in-law -- took the opportunity to speak to the federal judge, Matthew Perry, who sentenced Sullivan.

Under federal sentencing guidelines, based on the type of crime and Sullivan's having no previous criminal record, the range suggested for prison time was 51 to 63 months.

Perry lowered the sentence based on Sullivan's lifetime of deeds not involved with stealing millions from the elderly, widows, friends and people just like Edna Williams. The maximum penalty for mail fraud is 20 years.

All those people who were victimized by Sullivan were local people at the time when he swindled them -- just like the local people who went to Columbia to try to save Sullivan's skin.

Edna, who saved money nickels and dollars at a time, made it clear she thought Sullivan should have received the maximum sentence.

"Twenty years in the federal penitentiary, and then we would see if he would steal money from people like he did for so long," Edna said. "I'm here in a wheelchair with my leg cut off. He could be playing golf at Hilton Head. I lost a lot of money. Some we got back, and a lot more we didn't.

"I haven't seen Gene since this happened. If I do see him, I'm gonna tell him, 'Thanks for stealing my money.' "

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Copyright (c) 2010, The Herald, Rock Hill, S.C.

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Leave trial and error behind with this powerful tried and true presentation.