CHICAGO — A Chicago-based investment advisor faces jail time after pocketing more than $4 million from the sale of phony Chicago-backed securities that she described to investors as "Chicago Anticipatory Notes."

Delores J. Mosier, of LaPorte, Indiana, entered a guilty plea to one count of mail fraud, the U.S. Attorney in Chicago said Thursday.

Mosier, 72, must make $3 million in restitution payments to her clients and faces a jail term of up to 20 years and $250,000 in fines when she is sentenced by U.S. District Judge Gary Feinerman on Aug. 12.

Mosier is a licensed financial broker and investor who operated D.J. Mosier & Associates Inc. She told clients the city-issued "notes" would earn an annual interest of 7% or higher "intending that those misrepresentations would induce her client-victims to purchase the fictitious notes," according to the plea agreement.

"The securities did not exist, and Mosier pocketed the investment money," according to the plea agreement announced by U.S. Attorney for the Northern District of Illinois Zachary Fardon and Michael Anderson, special agent-in-charge of the Federal Bureau of Investigation's Chicago office. "The government contends that Mosier fraudulently obtained more than $4.2 million from approximately nine victims."

Clients made their checks out to "Chicago Anticipatory Note." Mosier steered the fund to an account she had opened under the name "CAN." She used the funds that came from nine clients to pay for household expenses and mortgage payments on a property in LaPorte.

The elaborate scheme dates to 2007 and continued through this year, prosecuters said. Mosier used some of the money to make purported interest payments to some victims who had also purchased the fictitious notes. She produced fraudulent documents including fictitious disclosure statements, phony quarterly interest statements, and bogus balance statements that wrongfully showed clients' growing investment proceeds.

Mosier advised her client-victims to reinvest the interest they were supposedly earning on the notes and to roll over the notes' purported principal into another note at the end of each note's one-year term.

Chicago hasn't issued short-term, cash-flow notes for some time, but its recent tax-exempt bonds on the long end have sold at 5% to 6% yields and between 7% and nearly 8% on the taxable side.

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