Crime & Courts

Swindler sentenced to 52 months

U.S. District Judge Joe Anderson sentenced a Columbia accountant to 52 months in federal prison Tuesday for mail fraud in connection with the swindling of two senior citizens out of most of their $800,000 life savings.

The sentence for Daniel Monahan, 49, who lost some of the Ellises' money in the stock market, exceeded the government's recommendation of 48 months.

"There's a need to educate the public that if you misappropriate money, you don't get a slap on the wrist," Anderson said.

The judge also said the public needed to be protected from Monahan, whom Tuesday's testimony said was a gambling addict and who still works as an accountant.

Although Monahan's lawyer, Gil Bagnell, said Monahan doesn't handle money in that job, Anderson said Monahan has access to "all kinds of sensitive" financial information.

Earlier, one of Monahan's victims, Stephanie Ellis, 74, told Anderson that Monahan was a "Bernie Madoff" - the notorious New York con man.

Monahan not only pilfered most of she and her husband's life savings, but the stress of the loss and being forced to rely on family for charity has shortened their lives, Ellis said.

"I had perfect health before all this started. But now I've had a heart attack," she said. Her husband, Marvin, 80, is in such poor health he could not attend Tuesday's hearing, she said.

Monahan has all 10 major signs of classic gambling addiction, including denial, an over-inflated ego and a belief that he can win money given enough time, said a defense witness introduced to try to keep Monahan out of prison.

With continued participation in Gamblers Anonymous, Monahan might improve but in prison he won't have the same opportunities to work on his cure, said psychologist Patrick Goldsmith.

In 2006, the Ellises sold their Pennsylvania business, moved to Columbia and gave nearly all the proceeds, some $800,000, to Monahan to invest. They trusted Monahan, a member of the upscale Spring Valley County Club, because their daughter worked at the country club. Monahan did her taxes.

Monahan was supposed to invest the Ellises' money in a property that would provide them with retirement income and defer taxes owed on the sale of their Pennsylvania business.

However, evidence showed Monahan created bogus properties and used the money to play the stock market. Consequently, he not only lost the Ellis money, but he also created some $75,000 in tax liability for them because their money wasn't invested in a tax-deferred asset.

In 2000, the State Board of Accountancy had revoked Monahan's certified public accountant license for taking $29,000 from a local Sertoma Club. He paid that money back and was never prosecuted.

Monahan told the judge Tuesday he was sorry.

"Why don't you turn around and tell (Stephanie Ellis) that?" Anderson asked.

"I never intended for any of that to happen. Obviously it was a very bad case of judgment," Monahan said.

A family friend, lawyer David Belding, who spoke for Monahan's wife, Cheryl, urged the judge not to give Monahan prison time so he could continue to work for her financial firm and make money that could go to restitution.

"The work he produces for people is of a very high quality," said Belding. "It obviously would destroy her business if he were incarcerated."

Anderson ordered Monahan to pay restitution to the Ellises. But both he and Assistant U.S. Attorney Winston Holliday said any significant restitution is unlikely.

Monahan's lawyer, Bagnell, said Monahan already owes a brother $400,000 and a third party, $600,000. Bagnell did not identify either.

Monahan pleaded guilty in June. Sentencing was delayed until Tuesday.

He has paid back more than $350,000 of the Ellises' money. Prosecutors put the amount of money he still owes the Ellises at $425,000.

After the hearing, Ellis quoted the Bible's Book of Galatians: "A man reaps what he sows."

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