Signage is seen at the USA Department of Justice headquarters in Washington, D.C., August 29, 2020.
Andrew Kelly | Reuters
This high-flying scam was all sizzle, no steak.
Two people whose Ponzi scheme raised a surprising $650 million from investors by falsely promising them profits from cattle and marijuana businesses were sentenced Friday to 6 years in prison.
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The defendants, Reva Joyce Stachniw and Ron Throgmartin, also were ordered by a Colorado federal judge to pay greater than $35 million in combined restitution and forfeitures, based on the Department of Justice.
Stachniw, 71, of Galensburg, Illinois, and Throgmartin, a 59-year-old Buford, Georgia, resident, were convicted at trial in August of wire fraud and conspiracy to commit each wire fraud and money laundering within the scam.
Prosecutors said that the defendants operated the Ponzi scheme from late 2017 through early 2019, together with a co-conspirator, Mark Ray of Denver.
Ray pleaded guilty in February 2020 in Illinois federal court to wire fraud and bank fraud in reference to the scheme. He’s free while awaiting sentencing.
The trio, who promised returns of about 10% to twenty% over periods of time as short as several weeks, solicited money from investors around the USA by offering them one among three different purported investment opportunities, court filings said.
“Most frequently, the conspirators fraudulently represented to victim-investors that their investments were backed by short-term investments in cattle,” the DOJ said in a May 2021 press release when the costs were first announced.
“Additionally they used false and fraudulent pretenses to solicit money from victim-investors for the conspirators’ Colorado-based marijuana business, Universal Herbs LLC,” the DOJ said.
Other victims gave the conspirators money based on false guarantees that it could be used for business activity related to cattle or marijuana, “without having the investment money linked to specific investment opportunities,” DOJ said.
In point of fact, the profits paid to investors got here from money placed within the Ponzi scheme by other unwitting investors, authorities said.
In an email to CNBC, Throgmartin’s lawyer Steve Sadow wrote, “Although nobody desires to receive a sentence of imprisonment, Mr. Throgmartin appreciates the Court’s fairness in imposing a 72-month sentence as a substitute of the federal government’s suggestion of a 108-month sentence.”
