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Three Tennessee Men Plead Guilty in
Top officers and a salesman for an investment company based in
Acting Assistant Attorney General
"The three men who pleaded guilty today schemed, lied, and stole at the expense of innocent investors," said Acting Assistant Attorney
"Ponzi schemes typically leave unsuspecting investors in financial ruin and many have lost their life's savings," said U.S. Attorney Rivera. "
"It is a priority of the
"Promoters of Ponzi schemes prey upon trusting investors and then steal their hard earned money," said IRS-CI SAC Henry. "Investors should be wary of programs promising unbelievable returns and investments should be looked at carefully. Remember the old cliche, 'If it seems too good to be true, it probably is'.
The three men were indicted by a federal grand jury on
According to court documents, the defendants carried out the fraudulent scheme from
Kretz and Bornstein also issued Hanover promissory notes to reimburse individuals who had previously lost money investing in ventures recommended by Bornstein before he joined Hanover. In some cases, these old investors contributed new money to Hanover, while in other cases, they invested nothing. In both cases, money from new investors in Hanover was used to make payments on promissory notes issued to cover non-Hanover losses without the Hanover investors' knowledge.
Haley, in his role as chief financial officer, furthered the fraud by sending note holders checks that purported to be for "interest" -- but were in fact simply transfers of money recently taken in from new investors. Haley also prepared a false balance sheet that overstated Hanover's financial health and that he knew would be shown to note holders.
The case was investigated by the
Today's convictions are part of efforts underway by
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