jessica stugelmayer
  • Home
  • Writing
  • Multimedia
  • Interactive
  • About

Ponzi Scheme victims paid

7/4/2013

 

Get $242,000 in restitution

HELENA — Restitution payments totaling over $242,000 will be made to victims of Cornerstone Financial, Inc. from Montana’s new Securities Restitution Assistance Fund.

The restitution was announced Tuesday by Commissioner of Securities Monica Lindeen and U.S. Attorney for the District of Montana Michael Cotter, who worked together to shut down the multi-million dollar Ponzi scheme in 2009. Charges in the case included wire fraud, mail fraud and money laundering.
Cornerstone is the one of the largest Ponzi schemes in Montana history. Ponzi schemes involve a cycle where early-stage investors are paid with funds given by new investors.  When the number of earlier investors begins to exceed the number of subsequent investors the scheme collapses.

“These defendants preyed on those in their community when they were in moments of financial necessity.  Such abuse of individuals under the guise of legitimate business is a crime that will be prosecuted by the Montana United States Attorney’s Office whenever it occurs and wherever it is discovered,” Cotter said. “This prosecution sends a strong message to persons engaged in such activity that they will be prosecuted to the fullest extent of the law.”

The two men at fault, Robert Congdon and Keith Kovick, are serving time in federal prison.  Since the investments they offered weren’t registered with the state or backed by a legitimate securities firm, victims had no way of getting their money back.

“The assistance we’re giving today really is the last chance for a lot of Montanans to get back on their feet,” Lindeen said. “Although it’s not much compared to what they lost, these checks may just be what pays the energy bill, the credit card, the mortgage this month for victims of securities fraud.”

Lindeen said even after Cornerstone’s assets had been liquidated, there was little left to give to the victims of the fraudulent investment firm.  Losses ranged from $49,000 to $784,000, with 14 out of more than 100 victims losing over $100,000.

“Generally these aren’t wealthy people, they’re just average, everyday Montanans,” she said.

The Securities Restitution Assistance Fund was created from a law passed in 2011 that states victims of securities fraud can receive 25 percent of their losses or $25,000 whichever amount is less.  The fund, the second of its kind in the nation, is modeled after Indiana’s restitution fund.  Money comes from court orders, orders from the commissioner and voluntary contributions from firms and brokers who violate the state securities law.

Victims were sent letters informing them they could apply to receive restitution from the Securities Restitution Assistance Fund, and 20 seized the opportunity.

In 2013, Lindeen and Rep. Duane Ankney, R-Colstrip, passed House Bill 81 that funnels a portion of fees collected by Lindeen’s office into the restitution fund.  The legislation will add nearly $272,000 to the fund each year.

Comments are closed.
    Read all of Jessica's writing on Muck Rack


    Archives

    April 2020
    December 2019
    June 2019
    April 2019
    February 2019
    January 2019
    March 2018
    January 2018
    October 2017
    July 2017
    June 2017
    May 2017
    December 2016
    November 2016
    October 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    January 2016
    December 2015
    November 2015
    October 2015
    December 2014
    November 2014
    October 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    August 2013
    July 2013
    June 2013
    November 2012


    Categories

    All
    49th State Brewing Company
    Agriculture
    Alaska
    Alaska Native
    Anchorage
    Anchorage Press
    Arctic
    Art
    Avalanche
    Baby Food
    Bambino's Baby Food
    Beer
    Bethel
    Business
    Cancer
    Community
    Courts
    Cover Story
    Crime
    CSKT
    Culture
    Diversity
    Dry January
    Editorial
    Eid
    Feature
    Flowers
    Food
    Gaming
    Glacier National Park
    Graduation
    Green Living
    Health
    Homer
    Homicide
    Honduras
    How-to
    Islam
    Italian
    Lake County
    Lake County Leader
    LGBT
    Libations
    Lifestyle
    Missoula
    Music
    News
    Outdoors
    Pablo
    Pacific Crest Trail
    Palmer
    Politics
    Polson
    PUNCH
    Rachael Ray Magazine
    Ramadan
    Recipes
    Restaurant Review
    Roller Derby
    Ronan
    Salish Kootenai College
    Sobriety
    Sports
    St. Ignatius
    Sustainability
    Travel
    Washington
    Wasilla



get in touch


  • Home
  • Writing
  • Multimedia
  • Interactive
  • About