By DON BABWIN and TERRY TANG, Associated Press
TONOPAH, Ariz. (AP) — Nelson and Janet Hallahan were known around working-class Peoria, Ill., for their wealth, and flashed it. That, residents said, may have helped make their get-rich-quick scheme all the more believable.
Their scheme was anything but real. They had bilked investors out of $1.2 million and were destined for two prison cells. Except, just before they were supposed to report to jail, the couple skipped town 12 years ago.
They were finally captured Saturday in a sleepy Arizona desert town, where they lived in separate homes, introduced each other as friends, not spouses, did odd jobs and would eat out on 99-cent "Taco Tuesdays."
Authorities, acting on a tip from "America's Most Wanted," arrested the Hallahans in Tonopah, about 50 miles west of Phoenix.
"They were staying off the grid, living in a rural area, not really having things in their names," said Matt Hershey, a supervisory deputy U.S. marshal in Phoenix. "They were just trying to lay low."
In court Monday, the couple, their wrists and ankles shackled, agreed to be extradited to Illinois.
Mike Waters, a Peoria attorney whose late uncle Jim Waters was among the Hallahans' victims, said he plans to be there when the couple next appears in an Illinois courtroom.
"These were working class people of modest means who invested their entire life savings," he said of the victims. "Most of them were retired and didn't have much chance to recover."
Like all Ponzi schemes, the Hallahans promised significant returns on investments and paid early investors with money they received from newer ones, authorities said.
In the 1990s, the sight of Janet Hallahan in her expensive clothes and jewelry didn't bother residents and may have helped sell their scheme because everybody could see how well the couple was doing, Waters said, who represented his uncle, a former postal worker, in a victims' lawsuit after the Hallahans filed for bankruptcy.
It later became shockingly clear what they were doing and what it had cost their victims. "While they were doing all this extravagant stuff they were wiping out people making $30,000, $40,000 a year," said Waters, who heard stories of the two walking around town in fur coats.
The Hallahans pleaded guilty to federal charges of conspiracy to commit mail and bank fraud and conspiracy to commit money laundering and then disappeared in January 2000.
The couple lived in several Southwest states under several aliases, authorities said. John Walsh, the host of "America's Most Wanted," said the show received multiple tips after it ran a segment Friday.
Hershey said authorities hadn't determined why they were living in separate homes. He said investigators hadn't found evidence suggesting they had run any schemes in recent years.
He said there was no evidence that the pair had obtained gainful employment.
"I had absolutely no idea. If I had known, I would have been first in line to turn them in," said Harold Clark, who rented a room in his home to Janet Hallahan for more than two years.
When U.S. marshals asked for her, he said he told them they had the wrong house.
"'Nobody lives here by that name,'" he recalled saying. "They said: 'You may know her as D.J.'"
To neighbors and residents of Tonapah, the Hallahans were D.J. Lee and Howard Wheeler. They were quiet and minded their own business but would also chat with neighbors.
According to Clark, Janet Hallahan didn't move in with much other than clothes and small items. He described her as "just an absolute, straight-up person, just a hardworking person."
Clark said Janet Hallahan always paid her rent on time. She sometimes cooked and cleaned around the house and was good with his three dogs.
Since she didn't own a car, Nelson Hallahan would pick her up and they would go do home repair jobs. Neither gave off the impression of living extravagantly, he said.
Clark said they would sometimes go out to dinner at a nearby restaurant for "Taco Tuesdays."
He said most of his conversations with them were general and didn't delve into their background.
Fred Wolf, Janet Hallahan's next-door neighbor, said he was shocked the woman who occasionally invited him over for coffee was actually living in hiding.