Ex-fugitive admits bilking client

A 40-year-old former Gardnerville businessman who spent the last several years as a fugitive in Chile pleaded guilty Tuesday to an investment scheme that bilked the victim out of more than $67,000.

In a plea agreement with state officials, Stephen J. Hadaway may be eligible for probation if complete restitution is paid by sentencing Jan. 13.

At the request of the defendant, District Judge Dave Gamble set sentencing out to give Hadaway a chance to raise the money.

He made a $35,000 payment Tuesday that included $1,500 to cover investigative costs incurred by the Secretary of State's office.

Gamble agreed to release Hadaway on his own recognizance. He had been held in Douglas County Jail since the end of April on $100,000 bail.

Under terms of the plea agreement, Hadaway agreed to forfeit items seized at his arrest and to disclose the source of the money used to make restitution.

Hadaway may not apply for a passport, and must wear an ankle monitor to track his whereabouts. He must remain in Nevada, with the exception of being allowed to live with his father in South Lake Tahoe.

Hadaway pleaded guilty to securities fraud and transacting business as an unlicensed broker, dealer or sales representative.

The maximum penalty is 20 years in prison and a $500,000 fine.

"No matter how many hoops you jump through, I can send you to prison for 20 years and fine you $500,000," Gamble said.

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.

"I lied to my client, I stole money from him that he invested. I did not have a license," Hadaway said.

Hadaway was operating from a business at 1382 Highway 395, Suite 3, in Gardnerville and an office in South Lake Tahoe.

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 is 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.