New Mexico man who stole tens of millions from investors could get off probation early

NEW MEXICO (KRQE) – The man once called the Bernie Madoff of New Mexico could soon be out from under the justice system. Doug Vaughan has been out of prison for the last few years and soon he may getting off early from his probation.

Vaughn started with a legitimate investment involving his New Mexico real estate business in the 1990s but by 2005 had turned it into a Ponzi scheme. Vaughan used his victims’ money to keep his real estate company afloat. It was also used on a mansion in Tanoan, luxury furniture, a Ferrari, high-end jewelry, and trips around the world. The scheme ended up bilking 600 investors out of $74 million over five years.

“The Doug Vaughan case happens to be characterized as most everybody in the law enforcement community as being the single largest financial crime in the history of New Mexico,” said Alan Wilson, New Mexico Securities Division.

Vaughn pled guilty in 2011 and was sentenced to 12 years in an Arizona federal prison. A decade later, he was released. In the meantime, his victims saw some restitution after investigators were able to recover $38 million and sell off some of his possessions. A judge ordered Vaugn to pay another $43 million but full restitution is still a long way off.

“The tragedy here is no matter what the sentence is none of the victims is going to be able to recoup any of what they lost,” said former U.S. Attorney Ken Gonzales.

According to a probation report, Vaughan has been following the court’s rules and making monthly restitution payments. Their recommendation? Let Vaughan off probation now, three and a half years early. Federal prosecutors do not object to that recommendation. A federal judge has yet to rule on whether to let Vaughan off of probation.