Ponzi schemer who promised cattle and marijuana income goes to jail

Signage is seen at the US Department of Justice headquarters in Washington, DC, August 29, 2020.

Andrew Kelly | Reuters

This high-flying scam was all sizzle, no steak.

Two people whose pyramid scheme raised a staggering $650 million from investors by falsely promising them profits from cattle and marijuana deals were sentenced to six years in prison on Friday.

The defendants, Reva Joyce Stachniw and Ron Throgmartin, were ordered by a federal judge in Colorado to pay more than $35 million in combined restitution and forfeiture, according to the Justice Department.

Stachniw, 71, of Galensburg, Illinois, and Throgmartin, a 59-year-old resident of Buford, Georgia, were convicted in court in August of wire fraud and conspiracy to commit both wire fraud and money laundering.

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Prosecutors said the defendants operated the Ponzi scheme from late 2017 to early 2019, along with a co-conspirator, Mark Ray of Denver.

Ray pleaded guilty in February 2020 in Illinois federal court to count of wire fraud and bank fraud related to the system. He is free while awaiting sentencing.

The trio, which promised returns of about 10% to 20% over periods as short as a few weeks, solicited money from investors in the United States by offering them one of three different alleged investment opportunities, court documents said.

“Most of the time, the conspirators have fraudulently led victim investors into believing that their investments were backed by short-term investments in cattle,” the DOJ said in a May 2021 press release, when the indictments were first announced.

“They also used false and fraudulent pretexts to solicit money from victim investors for the conspirators’ Colorado-based marijuana business, Universal Herbs LLC,” the DOJ said.

Other victims gave money to the conspirators based on false promises that it would be used for cattle or marijuana-related business activities “without the investment money being tied to specific investment opportunities,” the DOJ said.

In reality, the profits paid to investors came from funds invested in the Ponzi scheme by other unwitting investors, authorities said.

In an email to CNBC, Steve Sadow, Throgmartin’s attorney, wrote: “While no one wants to face a prison sentence, Mr. Throgmartin appreciates the fairness of the court in handing down a 72-month sentence instead of the government-recommended 108-month sentence. “