Jury awards $5.7 million in decade-old Sterling civil case

MORRISON – A Whiteside County jury Wednesday awarded $5.7 million to a Sterling businessman who was defrauded by his partner more than a decade ago.

Nyle F. Anderson, 67, and Frank C. Nelsen, 61, both of Sterling, were partners in Anderson, Wilkens and Lowe Insurance from 1985 to 2012.

Anderson’s civil suit claimed Nelsen stole millions of dollars from the company over several years, and the 12-member jury unanimously agreed.

Investigators still are trying to determine the exact amount Nelsen took, Paul Whitcombe, Anderson’s attorney, said Thursday.

Whether Nelsen now would face criminal charges would be up to the state’s attorney.

Whitcombe also released a statement Thursday. In it he said:

Anderson founded Anderson, Wilkens and Lowe in 1981 and brought Nelsen in in 1985. Nelsen was solely responsible for the company’s financial affairs.

The two became friends and partners in other ventures, but the relationship soured when Nelsen refused to give Anderson access to the insurance company’s books. In 2010, Anderson sued Nelsen, whom he accused of stealing millions of dollars by fraudulently diverting insurance commissions to Nelsen’s personal accounts and by secretly inflating his own salary, while at the same time telling Anderson the company was so broke it could not pay Anderson’s salary or health insurance for him or his wife, who had breast cancer.

The trial finally began June 15. Among the witnesses was Ron Braver, a former IRS special agent who reviewed company records and determined that Nelsen had indeed been embezzling company funds over many years – more than $1 million in 2007 alone, records show.

Nelsen admitted on the stand to creating false tax returns, failing to file those returns, and submitting fraudulent information to insurance brokers to generate more commissions. He also admitted to diverting commissions to his own accounts, but said that he did so only to protect the money from Anderson, and that he had paid back all the money, the statement said.

After deliberating slightly more than 4 hours, the jury returned a unanimous verdict in favor of Anderson, awarding him more than $5.7 million, which includes $2.5 million in punitive damages.

“The suffering that Mr. Anderson went through is incredible,” Whitcombe said. “This is an 11-year battle that was interrupted by all kinds of paper-shuffling and attempts to delay, and twice by COVID, but is spite of all that, justice was done.”

Nelsen could appeal the verdict, but to do so, he would be required to post 150% of the award as bond, Whitcombe said.

It’s the largest jury verdict in Whiteside County history, topping a $2 million award in 2019.

In that case, a Sterling family sued Morrison Community Hospital after their toddler was injured in November 2011 when a doctor wrapped his injured wrist too tightly, cutting off circulation and causing permanent damage.

A case between Anderson and Nelsen involving cross claims of breach of fiduciary duty remains; Judge Stanley Steines is set to rule in that matter on Aug. 4.

Anderson is represented by Dan Konicek of Konicek & Dillon and Whitcombe, who has offices is Dixon and Sterling. Nelsen is represented by Mark McClenathan of Heyl, Royster and Karl Bayer of Chicago.