ST. LOUIS – Two Missouri men on Friday admitted operating a long-running Ponzi scheme that cost more than 90 victims at least $3 million.
James “Jim” Johnson, 77, and Darrell Niswonger, 68, each pleaded guilty in U.S. District Court in Cape Girardeau to one count each of wire fraud, securities fraud and investment adviser fraud as dozens and dozens of victims looked on in court.
Niswonger also pleaded guilty to four additional counts of wire fraud.
Both men admitted engaging in a scheme to defraud that began in 2006. The pair claimed they were investing clients’ funds in municipal bonds when they were really using that money to fund lavish lifestyles that included country club memberships, sponsored golf tournaments, hundreds of thousands of dollars in improvements to Johnson’s home, educational expenses for a Niswonger relative and other personal expenses, their plea agreements say. Johnson and Niswonger also paid themselves a salary of $7,500 every two weeks and used some of the money to make payments to victims to lull them into believing that their investments were secure.
Operating out of a storefront in Perryville, Missouri as Johnson & Niswonger Financial Resources LLC since 2002, the pair initially offered clients annuities. But at least as early as 2006, the firm began experiencing cash flow problems. Johnson and Niswonger discussed offering clients what they referred to as tax-free and risk-free “municipal bonds.” Both men have now admitted as part of their guilty pleas that they knew they were going to use the money to keep their business and themselves afloat financially. The men had their clients sign one-page investment agreements that they called “Five Year Interest Bearing Note” or “Investment Note” or “Five Year Interest Bearing Investment.” They claimed clients would receive a guaranteed 5% return. The pair also persuaded clients to move their money out of legitimate investments into the fraudulent ones.
Johnson and Niswonger discouraged investors from withdrawing their money and urged them to roll over their bond investments because they lacked the funds to make the investors whole, their plea agreements say.
One investor asked them to withdraw his money from the “municipal bond investment” only to learn that Johnson had instead withdrawn money from the investor’s legitimate annuity. The son of an investor who died was told that he could not withdraw money until the bonds matured.
Over nearly 20 years, they took in millions of dollars from their friends, relatives and neighbors. Many victims encouraged others to invest, based on Niswonger and Johnson’s false claims about the investments’ success. Victims have now lost inheritances, the proceeds of selling their homes and farms and their life savings.
When Johnson & Niswonger shut down on April 22, 2025, they owed investors more than $3 million but had less than $22,000 in the bank account into which they have deposited investors’ money.
“Today, Jim Johnson and Darrell Niswonger finally admitted that they had been bilking clients for almost 20 years,” said U.S. Attorney Thomas C. Albus. “This fraud has affected a large number of Perryville-area residents, many of whom knew or were even related to Johnson and Niswonger. It has been not only a betrayal of trust but a major financial loss for them. We will do our best to try and recover as much money as possible for these victims.”
“One of the defendants stooped so low that he even swindled his own family members – an act that shows there is no line he wouldn’t cross,” said Special Agent in Charge Chris Crocker of the FBI St. Louis Division. “The U.S. Securities and Exchange Commission (SEC) says unlicensed, unregistered persons commit much of the investment fraud in the United States. Research the background of the person or firm before investing. The SEC has an online tool called, ‘Check Out Your Investment Professional,’ which can be used to vet a broker, investment adviser or a firm before trusting them with your money.”
Niswonger and Johnson are scheduled to be sentenced on November 13. Wire fraud is punishable by up to 20 years in prison, a $250,000 fine or both prison and a fine. Securities fraud is punishable by up to 20 years in prison and a $5 million fine and investment adviser fraud is punishable by up to five years in prison and a $10,000 fine.
As of their plea agreements, Johnson, of Perry County, and Niswonger, of Perryville, have both agreed to forfeit Johnson’s home, a 2019 Audi A5 Premium as well as $61,734 in two bank accounts and $10,302 in a brokerage account.
The FBI and the U.S. Postal Inspection Service investigated the case. Assistant U.S. Attorney Gwendolyn Carroll is prosecuting the case.