Mich. Man Pleads Guilty To Wire Fraud In Massive Ponzi Scheme
FLINT (WWJ) – The United States Attorney said a Michigan man pleaded guilty to wire fraud for his lead role in orchestrating a massive Ponzi scheme.
U.S. Attorney Barbara McQuade said 52-year-old Gregory McKnight of Swartz Creek pleaded guilty in federal court last Thursday to running a Ponzi scheme the government says swindled nearly $50 million from more than 3,000 investors worldwide.
According to court documents, from 2005 to 2007, McKnight solicited investments from members of the public on promises of exorbitant rates of investment return, upwards of 15% per month. McQuade said McKnight offered investments over the internet at a publicly available website, http://www.legisi.com.
During the course of the scheme, officials say McKnight obtained more than $72 million from over 3,000 investors worldwide. Contrary to what he represented to investors, investigators say McKnight’s investments were not profitable, and in the manner of a classic Ponzi scheme, he used new investor funds to pay periodic redemption requests of other investors.
McKnight’s scheme resulted in a loss to investors of over $49 million said McQuade.
Sentencing is scheduled for June 19 before United States District Judge Mark A. Goldsmith. If convicted of wire fraud, McKnight faces a maximum penalty of 20 years in prison and a fine of up to $250,000.