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$18M Ponzi Scheme Sentences
Two former Hanover Corporation executives have been sentenced to prison for their roles in a massive $18 million Ponzi scheme. Daryl Bornstein, 55, of Kinston Springs, Tennessee, was handed down a 60-month sentence, while his colleague Robert Haley, 55, of Lebanon, Tennessee, received 70 months in prison.
The duo was ordered to pay $14,454,999.19 in restitution for their crimes. Bornstein’s sentence also included a personal benefit of $100,000 in cash, while Haley prepared false balance sheets to deceive investors.
The scheme, which was led by Hanover’s former CEO Terry Kretz, involved soliciting investors with promises of stock options and startup companies. However, more than half of the money was used to repay earlier investors, pay salaries and overhead, and benefit the defendants personally.
Kretz, who was previously sentenced to 14 years in prison, was also ordered to pay $14,784,983.75 in restitution. The scheme was investigated by the FBI, IRS-CI, Tennessee Bureau of Investigation, and Tennessee Department of Commerce and Insurance.
The case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Scarlett S. Nokes of the Middle District of Tennessee. U.S. District Judge Todd J. Campbell handed down the sentences in the Middle District of Tennessee.
The sentencing marks a significant victory in the fight against financial crimes. As Assistant Attorney General Leslie R. Caldwell noted, ‘This case demonstrates the importance of holding individuals accountable for their actions and ensuring that justice is served.’
The investigation and prosecution of this case is a testament to the collaborative efforts of law enforcement agencies and prosecutors. It is a reminder that those who engage in financial crimes will be held accountable and face severe consequences.
Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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