United States Attorneys' Office
District of Minnesota

PRESS RELEASE. Tuesday, November 21, 2006
Contact:   Rachel K. Paulose, United States Attorney 
Jeanne F. Cooney, Director of External Relations

Media Line:  1-888-264-5107

Minneapolis  -  A Le Sueur County, Minnesota, businessman pled guilty to fraud charges today in federal court.  Stephen Douglas Oatway, age 45, entered a plea of guilty to one count of wire fraud and one count of filing a false income tax return relative to his crime.  He entered his plea before United States District Court Judge Paul A. Magnuson. 

Court documents in this case state that Oatway operated the investment businesses known as Nova Capital and Sun Valley Financial for several years.  Through those businesses, he sold securities and insurance products.  Between October of 2001 and June of 2004, however, he defrauded his clients of approximately $392,455 by diverting their investment funds for his personal use.  Specifically, in many instances, Oatway directed clients to make their investment checks payable to Nova Capital or Sun Valley Financial.  Oatway then deposited those checks into an account he controlled.  He subsequently used those funds for his own benefit instead of purchasing  the investment products he had promised his clients.  In addition, Oatway admitted filing a false U.S. Individual Income Tax Return for tax year 2003.  Specifically, Oatway failed to include as income $151,830 he had misappropriated from his investment clients.

Pursuant to the terms of a plea agreement entered in this case, Oatway faces between thirty-three and forty-one months in prison.  Moreover, Oatway agrees to pay restitution to the victims of his fraud scheme and resolve the debt he owes to the United States for unpaid taxes, interest, and penalties.  Oatway’s actual sentence will be determined by Judge Magnuson.  A sentencing date has not been set.     

This case is the result of an investigation by the Internal Revenue Service, Criminal Investigation Division, and the Federal Bureau of Investigation.  Assistant United States Attorney Frank J. Magill prosecuted the case.