Algrid M. Norkus, of Aurora, Illinois, has been sentenced to 63 months
in prison and ordered to pay $4.5 million in restitution for mail fraud
charges related to the operation of a $9 million
Ponzi scheme, according to a Jan. 23 Daily Herald article. Norkus pled guilty to the
scheme on March 10, 2011.
According to a U.S. Department of Justice press release, Norkus admitted
that he fraudulently offered and sold approximately $9 million of investments
in his company, Financial Update, Inc., to a number of investors. He also
admitted to misrepresenting the investment’s expected rate of return,
risks, and status.
Norkus further admitted that he lied to investors and potential investors
when he said their funds would be used to purchase lists of prospective
customers for Financial Update. Despite his claims, Norkus said he had
no intentions of purchasing any such lists after the beginning of 1998.
Instead, he admitted, he planned to misappropriate the money, commingle
it with his accounts, and use it for his personal purposes and to make
Ponzi payments to earlier investors.
As part of the plea agreement, Norkus also admitted that he provided investors
with falsified annual IRS Forms 1099-INT and bad checks to inspire trust
and keep them unaware of the Ponzi scheme.
“He [Norkus] provided checks to certain investors drawn on bank
accounts that contained insufficient funds to lull them into the belief
that their investments had been used as represented, were causing Financial
Update to earn money, and that the money earned on the investments was
used to pay interest on the investments,” the Assistant U.S. Attorney’s
office wrote in the DOJ release.
Norkus, who could have been sentenced to 20 years in prison for the investment
scheme, will be required to serve three years of supervised release after
his term in prison.