An 89-year-old Little Rock man has accused an ex-con of defrauding him of $4.5 million in less than three years.
Richard F. Toll said in a lawsuit filed last month in Pulaski County Circuit Court that Kristian D. Nelson of England “seized the opportunity to take advantage of a generous elderly man whose memory was declining.”
The fraud started in September 2017, when Toll first lent Nelson $10,000 for the restaurant Hawgz Blues Café LLC of Little Rock, the suit said. Nelson told Toll he owned the restaurant, but he didn’t, it said.
Nelson then kept returning to Toll’s house on an almost weekly basis “with manipulative lies and fabrications to entice more and more money from Toll,” according to the suit filed by Toll’s attorney, David D. Wilson of Friday Eldredge & Clark of Little Rock. “It has become clear that Toll was just another in the long line of victims of the fraud and deceit of Kristian D. Nelson.”
Nelson said he needed money for the Little Rock restaurant, a second Hawgz site in North Little Rock and a used car outlet, I Sell 4 U Auto Sales LLC of North Little Rock, that Nelson formed in 2018.
Nelson, who in 2009 was sentenced to 71 months in federal prison for wire fraud after taking about 20 investors for more than $1 million, denied the allegations to Arkansas Business last week.
Nelson, 47, said Toll’s business consultant was at the weekly meetings and an attorney from the Friday firm also knew that Toll was making the loans used for the businesses. Wilson, Toll’s attorney, said last week that Nelson “is not able to completely tell the truth.”
Nelson said in a court filing that the lawsuit should be dismissed because he hasn’t defaulted on the loans.
“At issue, Plaintiff’s Complaint is wrought with inflammatory characterizations and scandalous character attacks in an attempt to detract from the prevailing issue: Plaintiff and Defendant are competent adults who entered into several business transactions,” Nelson’s attorney, Robin Vail of the Law Offices of Miller Vail of Heber Springs, said in the filing. She also represents I Sell 4 U Auto Sales, also a defendant in Toll’s lawsuit.
Hawgz Blues Café also is being sued. Nelson told Arkansas Business that he is the restaurant’s CEO but isn’t an owner. The café is represented by attorney Kathryn Hudson of Little Rock, who said in an email to Arkansas Business that, “Kristian Nelson is not the owner but the manager, and Hawgz Blues Cafe denies the complaint.”
In 2011, the year before Nelson was released from prison, Toll hired Nelson’s mother, Sherrie Nelson, to be an in-home caretaker for his wife. Toll’s wife died in 2014, and Toll, who had been in the real estate development industry, continued to employ Sherrie Nelson for cleaning and household services.
Meanwhile, Kristian Nelson continued to have legal problems. He filed for personal bankruptcy in 2013, listing nearly $15,000 in assets and $1.2 million in debts. Most of the debt was for restitution in his federal case.
In 2016, Nelson got into a legal fight with Mike and Gina Fullerton, whom he met at church. The three teamed up to turn a former yoga studio west of Little Rock on Pinnacle Valley Road into a restaurant and to build an office building next door.
The deal soon collapsed. Suits were filed against Nelson and the construction company he worked for, alleging work wasn’t properly completed. The Fullertons said Nelson received about $40,000 to start work on the office building, but he only poured the slab.
Nelson also filed a lien and a lawsuit against the Fullertons, alleging they used Nelson’s status as a convicted felon to keep him from getting an ownership interest in their joint business venture.
The Fullertons sued to remove the lien on the property, because “they know they’re never getting a penny out of him,” their attorney, Brandon Haubert of North Little Rock, told Arkansas Business last week. “My clients actually just want the lawsuit to go away.”
That case is pending. (See more at Church Friendship Collapses Along With Building Plans.)
In 2017, Sherrie Nelson was still working for Toll. She asked him to help her son with a loan. Toll agreed to meet Kristian Nelson, and Nelson came to Toll’s house, seeking a loan for $10,000 to cover hot checks written by Hawgz, the suit said.
Toll provided the loan. A few weeks after receiving the $10,000, “Nelson convinced Toll that the restaurant business was turning around and that he would be able to pay the loan back soon, but he needed another $15,000 loan to keep his business going,” the suit said. “Toll agreed, and wrote him another check.”
Toll asked that Nelson give him weekly updates on Hawgz, so that he could know when to expect repayment.
Meanwhile, more money flowed from Toll to Nelson. In 2018, according to the complaint, Nelson came to Toll and said he needed money to open another Hawgz location in order to repay the loans. (Nelson told Arkansas Business that the North Little Rock location opened in 2017.)
“Each additional loan amount was necessary in order for there to be any hope of the business of Hawgz being able to repay Toll,” the suit said.
The suit said that the Little Rock Hawgz location closed in 2018, but the North Little Rock location remains open.
In November 2018, after Toll had lent Nelson more than $600,000, Nelson told Toll that Hawgz was never going to make enough to repay the loans, the suit said. Nelson said he could start a used-car business and all its profits would be used to repay Toll, the suit said.
But to start I Sell 4 U Auto Sales, Nelson would need to borrow even more money from Toll. Toll lent Nelson money for the new business while continuing to support Hawgz throughout 2019.
In November 2019, Toll fell and his memory “began to decline further,” the suit said. “Nelson has since admitted that he knew Toll’s memory had deteriorated as of that date, yet Nelson’s defrauding of Toll only accelerated,” the suit said.
By the end of 2019, checks from Toll to Nelson totaled $2.8 million.
In 2020, Toll continued to lend Nelson money. Between Jan. 15 and May 15, Toll wrote seven checks to Nelson or I Sell 4 U totaling $1.6 million, according to the lawsuit. In May, Toll asked other family members if he could get access to his wife’s trust assets, “because he was running out of money,” the suit said.
Toll’s family and attorneys investigated and told Toll what Nelson had done.
“Toll was shocked at the total amount loaned to Nelson,” the suit said. “At first, Toll was reluctant to believe that Nelson would lie to him about the amounts, the necessity of and the use of the proceeds.”
In June, Nelson showed up at Toll’s house requesting more money. Nelson told Toll that he would never be repaid if Toll did not provide him more cash, the suit said. Toll eventually agreed to lend Nelson an additional $100,000, “which was basically the balance of Toll’s remaining liquid funds,” the suit said.
Toll’s family tried to negotiate a settlement with Nelson and a way for him to repay Toll, “all to no avail,” the suit says.
Toll is seeking at least $4.5 million, the total that he lent Nelson, and at least $8.9 million in punitive damages.
Nelson said he’s been trying to move past his felony conviction more than a decade ago and just wants to be allowed to work. “I’m not saying that I’m perfect,” he said. “I’ve made business mistakes, but not intentionally trying to hurt anyone.”