OMAHA — Three Omaha men have been sent to federal prison for operating what prosecutors say was a Ponzi scheme that cost victims $4 million.
Jonathan Arrington, Michael Kratville and Michael Welke were sentenced Thursday in U.S. District Court in Omaha. The men each faced 14 counts, but each had pleaded guilty this year to one count of wire fraud in return for admitting guilt.
Arrington, believed to be the scam's leader, was given five years in prison, while Kratville was given four years and Welke three years. The 114 victims lost an average of $40,000 in the scheme that ran from 2005 through 2008, with at least one married couple out $500,000.
"I want to say how disappointed I am in Jon Arrington," said Gary Nielsen, one of four victims allowed to address the court during the sentencing hearing. "We have been friends for 30 years, since we were 15. You were in my wedding, and I was in yours."
Prosecutors said the three men operated two companies guaranteeing large returns and low risk to investors in commodities and foreign currencies when the companies actually were hiding their losses. Authorities said the men used more than $700,000 to pay themselves and use toward golf club memberships, travel and dining.
The men will be ordered to report to federal prison in about 60 days. The amount of restitution is to be determined later.