Couple in Illinois Ponzi scheme caught in Arizona

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TONOPAH, Ariz. (AP) — An Illinois couple who spent a dozen years on the run after fleeing a conviction for running a Ponzi scheme has been captured in a small community west of Phoenix, the U.S. Marshals Service said Sunday.

Nelson Grant Hallahan, 65, and wife Janet Hallahan, 54, were arrested by deputy marshals Saturday afternoon in Tonopah, a desert community 50 miles west of Phoenix. The couple had lived in several states in the Southwest during their flight and had used a number of aliases, the Marshals Service said in a statement.

The Hallahans were living apart and were arrested at separate homes, said Matt Hershey, a supervisory deputy U.S. Marshal.

The agency said it received a tip about their location after they were featured on "America's Most Wanted" the previous night.

The couple pleaded guilty in Illinois federal court to bank and mail fraud conspiracy charges and money laundering. They didn't show up for their sentencing and have been fugitives ever since.

The Hallahans lived in Peoria, Ill., and targeted family, friends and elderly victims by promising significant returns on investments. They also defrauded investors by selling interests in a tanning salon they later sold without telling investors. They were actually running a Ponzi scheme, repaying earlier investors with proceeds from new ones.

The couple used the money they stole to live a lavish lifestyle, buying yachts, luxury vehicles, designer clothes and jewelry, according to the Marshals Service.

According to a profile on the AMW website, Nelson Hallahan was a successful life insurance salesman. Janet Hallahan was his assistant and secretary, and the couple married in 1988.

Teresa Allred, 63, said she and her husband went to dinner with the Hallahans several times and had considered them friends.

They gave the Hallahans $15,000 to buy more tanning beds for the salon. Allred, who lives with her husband just outside Peoria in Morton, Ill., said the Hallahans promised them a 10 percent interest rate on the investment. But they never saw the money again.

"With friends like that, who needs enemies?" she said.

The Hallahans owed nearly $1.2 million to investors when they disappeared just days before they were to be sentenced in January 2000.

"The 12-year run from justice of the Hallahans, also known as the 'Mini Madoffs,' has come to an end," U.S. Marshal for Arizona David Gonzales said in a statement. "Their investment scams involving family, friends, and the elderly, ruined many lives."

The couple was arrested without incident. It's believed they've been in Arizona for about two years.

"I'm just glad that they've been found," Allred said. "We may or may not see our money, but at least I feel like there's a little bit of restitution."

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