Hartford -- A woman who made $40,000 by participating in the Shoreline “gifting tables” illegal pyramid scheme without claiming the money on her tax return was sentenced Wednesday to one year of probation, which will include six months of home confinement with electronic monitoring.
Nancy Dillon, 70, of Branford, also must pay a $2,000 fine and perform 100 hours of community service, under the sentence imposed by U.S. District Judge Alvin W. Thompson.
When given an opportunity to speak to the judge, Dillon was apologetic. A mother and grandmother, Dillon became emotional when she told the judge how the situation has caused stress on some of her family relationships.
“I certainly stumbled into something I regret with all my heart,” Dillon said. “This has been the most difficult time of my life. This was a mistake, and there won’t be another one.”
Last June, Dillon pleaded guilty to one count of willful failure to file a return, supply information or pay tax. The charge carried a maximum penalty of up to one year in prison.
According to Thompson, while on probation, Dillon must not commit any crimes and she must pay any outstanding interest and penalties to the Internal Revenue Service.
Dillon made the $40,000 by participating in the gifting tables scheme in 2009. According to the U.S. attorney’s office, even though an attorney advised Dillon the money was taxable income and not a gift, she failed to pay federal income taxes on it.
Dillon’s defense attorney, Christopher Duby of Hamden, had asked for his client to receive probation, as this was her first criminal conviction of any kind. Duby said Dillon has been honest and forthright with him.
“Her likelihood of being a recidivist is virtually non-existent,” Duby said. “Nothing in her past indicates she is likely to commit further criminal acts of any kind.”
According to Duby and Assistant U.S. Attorney Douglas P. Morabito, Dillon has already paid the taxes owed to the IRS on the $40,000.
Duby said the taxes came to $11,200, and Dillon paid it shortly after she entered the guilty plea, so, he said, “the public has been made whole.”
His client was not one of the leaders of the scheme, according to Duby.
He noted in a sentencing memorandum that several people wrote to the judge on Dillon’s behalf, with the letters making the same point: “Nancy is a generous, caring and friendly person who has lived a life filled with good deeds.”
Dillon was among five women who have been charged in connection with the scheme, which was first reported by the New Haven Register in 2010.
Donna Bello of Guilford, accused of starting the scheme, was sentenced to six years in prison, and Jill Platt of Guilford received a 4½-year sentence. Both were granted releases pending appeals.
Bettejane Hopkins of Essex got probation and community service after pleading guilty to conspiracy to defraud the IRS.
Eileen Brennan of Branford, who pleaded guilty last year to failing to pay taxes on money she received, is scheduled to be sentenced March 24.
Thomas Carson, a spokesman for the U.S. attorney’s office, said Wednesday the “investigation is ongoing.”
A gifting table is configured as a four-level pyramid, with eight participants assigned to the bottom row, four assigned to the third row, two assigned to the second row, and one participant assigned to the top row, according to the U.S. attorney’s office.
The top row participant is called the “dessert,” the two participants on the second row are “entrees,” the four participants on the third row are “soup and salads,” and the eight participants on the bottom row are the “appetizers,” prosecutors said.
To join a gifting table, new participants were required to pay $5,000 to the person at the top of the pyramid. The $5,000 payment, which was fraudulently characterized as a gift, secured the new participant a position on the bottom row. Participants progressed from the bottom row of the pyramid by recruiting additional people to join the gifting table, the U.S. attorney’s office said, in a press release.
The person occupying the “dessert” spot would collect $40,000, then leave the table.
That particular gifting table was then split, with the two participants occupying the “entree” positions on the second row moving to the top, or “dessert” position, of two new pyramids.
Other members of the pyramid would move up a row, and the search for new participants began. The success of the gifting tables depended on new participants joining and making the $5,000 “gift,” according to the U.S. attorney’s office.
Editor’s note: This story has been updated from an earlier version. Nancy Dillon is a resident of Branford, not Guilford. The U.S. attorney’s office corrected the information it sent.
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