DALLAS -- A former Colleyville businessman and candidate for governor of Alabama was sentenced late Tuesday afternoon to more than 17 years in federal prison for creating a pyramid scheme that netted him more than $25 million.
James Phipps, 60, who ran a Ponzi scheme known as “Life Without Debt,” was ordered to spend 210 months in prison.
Last year, a federal jury convicted Phipps of money laundering, mail fraud, income-tax evasion, wire fraud and corrupt endeavor to obstruct and impede Internal Revenue Service laws.
Phipps ran the scheme from June 1996 through early 2006, operating it from his home in Colleyville until August 2001 and then continuing it at his new home in Alabama, federal prosecutors have said.
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He operated the scheme by using unsolicited faxes, unsolicited mailings, weekly conference calls and live seminars that encouraged people to become members and contribute money, federal prosecutors have said. Members were encouraged to contribute between $2,000 and $100,000.
In April 2006, Phipps was arrested in Alabama where he was running for governor of the state at the time.
He was released shortly after his arrest pending his trial. But he was jailed again in October 2006 after he violated the conditions of his release by continuing to participate in a pyramid scheme, authorities said.