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Developer awaiting verdict on multiple charges

The fate of a Medford developer and mortgage broker accused of fraud, theft and racketeering charges related to an ill-fated real estate development rests with a Jackson County Circuit Court jury.

Before beginning their deliberations shortly after 3 p.m. Tuesday, jurors spent five days listening to allegations that James Charles Nistler created an elaborate Ponzi scheme and bilked local investors for about $1.2 million.

Nistler, 79, is charged with a single count of racketeering and eight counts each of aggravated first-degree theft and securities fraud.

Nistler's attorney, Michael Kellington, argued his client is not a criminal. He is a victim of high hopes and poor timing. Nistler's own money was swallowed up after his real estate venture, a Medford subdivision called Tennessee Acres, collapsed due to the failing economy and bad business partners, Kellington said.

"This is a (failed) real estate deal, not an evil Ponzi scheme," Kellington said. "This project was a disaster for Mr. Nistler."

Prosecutor Rachel Bridges warned jurors not to be misled by the defense in the complicated case.

"(Nistler) conned a lot of people," she said. "Now he's trying to con 12 more."

Medford police launched an investigation into Nistler and his mortgage company, First Call Mortgage and Investments LLC, in November of 2007 after getting complaints from investors who believed he had defrauded them.

The department's financial investigation section uncovered what appeared to be serious problems in Nistler's operations and called an investigator from the Oregon Division of Finance and Corporate Securities, a state agency that regulates the securities and mortgage industry.

The team determined Nistler illegally obtained funds from people by deceiving them about the Tennessee Acres investments. Nistler had advertised in the Mail Tribune, promising a high rate of return on short-term investments.

Investors contacted police in November 2007 to complain that Nistler didn't tell them how the funds were used and that they believed the money had been funneled to pay off other investors in a classic Ponzi scheme. Several of Nistler's investors were cheated out of their retirement savings, "out of their futures," Bridges said.

"You have a big crime in front of you," Bridges said. "And all roads lead back to Jim Nistler."

Kellington scoffed at Bridges' characterization. Calling it a Ponzi scheme is "offensive," he said. Some of Nistler's investors may not have clearly understood the risks involved when they put up their money, but that doesn't mean his client didn't explain the risks, he said.

"And complex doesn't mean illegal," Kellington said.

Nistler failed to inform investors their money was being used to pay off old massive incumbrances on the properties — debt that Nistler created in part by paying himself unwarranted fees and refunds, Bridges said.

"He purposefully withholds information to get their money," Bridges said.

As the financial hole deepened, Nistler continued to entice new investors into his scheme, she said. Even after police warned Nistler to stop, he continued to seek new investors to keep his scheme afloat, she said.

"If it's all about the market crash, why is (Nistler) still advertising for 14-percent construction loans in the newspaper in April 2009?" Bridges said.

Linking the activities of Nistler, First Call and another company he was involved in, Jackson County Development LLC, Bridges argued Nistler had violated Oregon securities laws by engaging in unlicensed securities activity.

"This is a super-complicated way to steal money," Bridges said. "Securities laws exist so people (like Nistler) don't rob you of your future."

Nistler's wife, Michelle Marie Nistler, 56, was also originally charged with the crimes. The couple were arrested at their home in the 6600 block of McLoughlin Drive, Central Point, in May 2009. Charges were subsequently dropped against Michelle Nistler.

James Nistler has lived in the Rogue Valley since 1957 and has been involved in real-estate development and finance, as well as serving as a deputy assistant secretary with the U.S. Department of Housing and Urban Development. Nistler also has an extensive record of civil cases in Circuit Court.

Reach reporter Sanne Specht at 541-776-4497 or e-mail sspecht@mailtribune.com.