Swindler makes restitution, gets probation

A former Gardnerville businessman who spent several years in Chile as a fugitive was sentenced to probation Tuesday for an investment scheme that bilked the victim out of more than $67,000.

Stephen J. Hadaway, 40, apologized to the ex-wife and son of the victim who attended sentencing.

Although he wasn't charged with taking their money, he agreed to pay $42,500 he swindled from them.

Turning to face the mother and son, Hadaway said he was ashamed.

"I broke a bond we had. I have known (the son) since he was 4. I swear to you that you will get your money as soon as possible," he said. "I am truly sorry from the bottom of my heart."

Hadaway pleaded guilty to securities fraud and transacting business as an unlicensed broker/dealer.

Charges were filed against Hadaway in 1999 by the Nevada attorney general's office, but then he disappeared.

He returned to the United States from Chile in April.

According to court documents, the crimes allegedly were committed in 1996-97.

Hadaway is accused of setting up a business called OPM Asset Management. He reportedly talked the victim, whom he met while giving the man's son ski lessons, into making a $2,500 investment. A month later, he paid the victim $5,000 as a return.

A few weeks later, the victim asked Hadaway to invest $41,650. At that point, the victim's fortunes began to turn, but he still gave Hadaway money, according to documents, ultimately losing $67,150.

Gamble sentenced Hadaway to eight years in Nevada State Prison on each charge, suspended, and placed him on five years probation.

He must pay restitution at $925 a month and is to prove to his parole officer the source of the funds for the restitution.

Hadaway is forbidden from selling securities during probation or acting in violation of the Nevada Securities Act.

He was given credit for 84 days in custody after his return to the United States in April.

Hadaway faced up to 20 years in prison and a $500,000 fine.

"I apologize for letting this case go on for 10 years," he said. "I want this monkey off my back. I haven't seen my wife for a year. I have a fresh start."

Gamble cautioned Hadaway against looking at the sentence as closure.

"Closure will come the day you pay the last dollar of restitution and complete your probation," Gamble said.

John P. Kelleher, assistant chief deputy attorney general, described the transactions as a "Ponzi scheme."

"Basically, we believe he was telling the victim he was investing money in companies, but took some and put it in his own pocket and would use the new victims' investments to pay dividends to older investors," Kelleher said in a previous interview.

According to the court documents, Hadaway was accused of using some of the victim's money to pay off an account at Harrah's. There is no proof he bought any stock.

Records indicate Hadaway's securities sales representative license issued by the state expired in December 1995. He also was the subject of disciplinary procedures by the National Association of Securities Dealers, according to court documents.