In August 1917, Nelson returned to Southern University where he worked as the private secretary of President Daniels.[12] When America entered World War I, he joined the local Red Cross organization.[13] He was inducted into the military but did not serve.[14] In 1918, Nelson was a bookkeeper with Rosenberg Bros. in Pike County, Alabama.[1]
In September 1919, Nelson traveled to Flandreau, South Dakota and North Dakota for business.[15] In 1920, he lived in Flandreau where he worked as an underwriter for an insurance company.[16] In 1921, he moved to Sioux Falls, South Dakota, hoping to pass as a relative of a recluse in Flandreau.[17] When that failed, he became an accountant for the Bourroughs Adding Machine Company in Sioux Falls.[18][17]
In Sioux Falls, Nelson joined the Masons and was the organist for the Unity Lodge.[19] He was also a member of the Knights of Pythias and the secretary and treasurer of the South Dakota Legion of the Mooseheart, No. 194 of Sioux Falls.[20][21][22][17] However, there were also signs that Nelson was not forthright. Although of German ancestry, the Alabama-born Nelson told people in Sioux Falls that he was born in Germany.[23] He initially attended the Episcopal church and became a Sunday school teacher.[17] There, he told stories of his connections to the English aristocracy.[17] After his relationship with the church declined, he became a member of the Catholic Church where he claimed to have studied theology and expressed a desire to join the clergy.[17] Soon, he became the scoutmaster of the church's Boy Scout troop.[17]
In 1920, Nelson started the Sioux Stamp Company at 225 1/2 South Main in Sioux Falls with partners K. B. Woodruff and F. W. Steer.[24][25][17] The business bought and sold collectible postage stamps and reported an inventory of around 1,500,000 stamps, worth $10,000 ($164,067 in 2022's money) in July 1921.[24] It also sold company stock to local businessmen.[17] By February 1922, the business had moved to a larger suite in the National Bank Building and had established a branch in Kansas City, Missouri.[26] Nelson was proposed for membership in the American Philatelic Society in April 1921.[27] However, the business failed; its stockholders lost their investment and Nelson was broke.[17]
Around the time that his business failed, members of the Moose Lodge discovered that $144.44 was missing.[17] Nelson borrowed $50 from a friend on July 1, 1922, claiming he needed the loan to travel to Chicago for his half-brother's funeral.[17] The next day, Nelson left Sioux Falls for Canada after embezzling funds from the Legion of the Mooseheart.[20] He was accompanied by fifteen-year-old Clyde Smith, a member of the Boy Scout troop of which Nelson was the leader.[17] The two traveled separately to avoid detection.[17] After the two sent Smith's mother a letter, she contacted the Family Welfare Association which contacted Canadian authorities.[17]
Officials feared Nelson had kidnapped Smith.[28] Later, Smith claimed that he went willingly after Nelson promised adventures fishing, hunting, and trapping, as well as money.[22][17] Although Nelson talked about acquiring a farm, Smith ended up working as a clerk in Winnepeg and Nelson sold typewriters.[17] The two claimed to be the Newman brothers and also went by the aliases William Regan (Nelson) and Jack Wilson (Smith).[29][23][17] When Nelson lost his job, he told Smith he was leaving to become a Catholic clergyman in Toronto.[17]
The Royal Northwest Mounted Police traced the fugitives through Saskatchewan to Winnipeg, where they found Smith on October 27, 1922.[17] With Smith's help, the police caught Nelson as he stepped off a train in Toronto.[29][30] Nelson was arrested and charged with contributing to the delinquency of a minor, kidnapping, fraud, and embezzlement.[29][30] In late October, Smith's mother went to Winnipeg to retrieve her son; Smith returned to Sioux Falls on November 2, 1922.[17]
Nelson was extradited to Sioux Falls on November 4, 1922.[21] He had a preliminary hearing in municipal court on November 6 where his bail was set at $500.[21] On November 10, 1922, Nelson pled guilty to theft of the Mooseheart Legion funds; he had returned the $244.41 that he embezzled when he returned from Canada.[20] Judge Medin of the Circuit Court sentenced Nelson to eighteen months in the South Dakota penitentiary.[23] The judge also reproved Nelson for the fictitious background stories that he told in Sioux Falls.[23] Nelson was expelled from the American Philatelic Society in December 1922.[31]
In September 1927, Mrs. J. B. Nelson of Sioux Falls ran an advertisement looking for her husband, last known to be in Perryton, Texas.[32] One fraternity historian says Nelson died of tuberculosis in Colorado but official records do not confirm this'; another report claimed that he moved to Texas.[2] Phi Kappa presents the Jacob Broughton Nelson Award to the fraternity's outstanding grandmaster of the year; the award was named in honor of Nelson.[33][34]