An Illinois woman and a Georgia man were indicted for running an alleged Ponzi scheme that involved fake cattle trades and a Colorado cannabis business, DTN.com reports.
Reva Joyce Stachniwand and Ron Throgmartin were each charged with federal wire fraud and conspiracy by the Department of Justice last week, while a third person, Mark Ray, who owned Colorado-based Universal Herbs LLC, was charged in federal court in February 2020 for his part in the conspiracy.
Using the made-up cattle trading company MR Cattle Production Services LLC, the three were accused of defrauding investors of over $650 million between 2017 and 2019. The charges grew from a civil complaint issued by the Securities and Exchange Commission (SEC). In the 2019 SEC complaint, Ray is accused of selling unregulated securities related to a cattle company and his cannabis company as far back as 2014.
The three and other unnamed conspirators procured investments from victims with promises the money was going to legitimate business activities related to the cattle business and Universal Herbs LLC, and issued assurances of short-term returns, DTN reports. Rather, the money received was used to pay back investors within the scheme with $140 million moving around various bank accounts at the high point of the conspiracy. According to receivership documents, Ray has 98 claims against his holdings, filed by investors and banks. Stachniwand settled with the court for $7 million in October 2020, according to the report.
The conspiracy unraveled when a bank raised concerns over the amount of money moving through three business checking accounts owned by Stachniwand. The report says Throgmartin lied and claimed the funds were from cattle trades and went so far as to forge invoices showing fake cattle buys to cover their tracks. According to the report, by 2018 — after Stachniwand had transferred $9 million to her personal accounts and Throgmartin had received $3 million — the scheme began to collapse, leaving an unknown number of investors holding the bag.
The pair face seven federal counts, including one count of conspiracy to commit wire fraud, five separate counts of wire fraud and aiding and abetting, and one count of conspiracy to engage in monetary transactions for unlawful activity. They face up to 10-30 years in prison and could pay up to $1 million per count.
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