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Texas Resident to Serve Prison Sentences for Ponzi Scheme Convictions

According to the U.S. Attorney's Office, a Texas man and woman will pay millions of dollars in restitution and serve time in federal prison for allegedly operating a Ponzi scheme that defrauded over 100 people out of around $10.6 million. The 43-year-old man who investigators claim started the scheme was sentenced to 40 years in prison while the 49-year-old woman who allegedly assisted him beginning in 2009 received a six-year sentence.

The male suspect plead guilty to criminal charges of conspiracy to commit money laundering and wire fraud following his arrest in October 2012, while the woman pleaded guilty to wire fraud. Prosecutors allege that the man began defrauding unwitting investors with the Ponzi scheme in April 2008, wrongfully coercing them out of money on fraudulent pretenses. The female suspect reportedly joined the man in September 2009, after which the pair allegedly continued the scheme until 2011.

Prosecutors contend that the two suspects would typically contact potential victims with investment offers, telling them their money would be invested in foreign currency exchange trades after being placed into various funds. Investigators say that the suspects would then collect between 25 and 30 percent of the profits.

The U.S. attorney who helped prosecute the suspects said their sentences are proof of his office's goal of "bringing white collar criminals to justice." He explained that the severity and number of people affected by the scheme warrant the harsh penalties ultimately faced by the two suspects, arguing that such offenses result in "serious damage to victims, both financially and emotionally, and therefore demand serious punishments."

The male suspect was charged with and convicted on five counts of federal bank fraud in 2003, serving two years in federal prison for the offense. The prior conviction may have contributed to the length of his new sentence. His accomplice does not appear to have a similar history of white collar crime.

Source: KHOU, "2 sentenced to federal prison for Ponzi scheme," Jordan Armstrong, Feb. 15, 2013