Galesburg woman sentenced to federal prison for Ponzi scheme

Posted: Feb 20, 2023 / 11:54 AM EST

Updated: Feb 20, 2023 / 11:54 AM EST

A 71-year-old Galesburg woman was sentenced Friday to seven years in federal prison, according to court documents.

According to court documents and evidence presented at trial, Reva Joyce Stachniw (whose last name also is listed as Hennefent in public records) and Ron Throgmartin, of Buford, Georgia, ran a Ponzi scheme from late 2017 until early 2019 by fraudulently representing to victim-investors that their investments were backed by short-term investments in cattle and marijuana.

Throgmartin was convicted by a federal jury of wire fraud and conspiracy to commit money laundering.

Stachniw was sentenced in the U. S. District Court for the District of Colorado, court records show. She was ordered to surrender to the institution designated by the Bureau of Prisons within 15 days from the date of designation. The court recommends that the Bureau of Prisons place her in the Federal Correctional Institution in Pekin, Ill.

The two were involved in what court documents say was a massive Ponzi scheme that fraudulently raised money from investors across the country, according to an Aug. 26, 2022, news release from the U. S. Department of Justice,

A Ponzi scheme and the conspirators

Court documents show the two, along with a co-conspirator, used false and fraudulent pretenses to solicit money from victim-investors for the conspirators’ Colorado-based marijuana business, Universal Herbs LLC. Other victim-investors gave the conspirators money based on false promises that investment money would be used for legitimate business activities related to cattle or marijuana, without having the investment money linked to specific investment opportunities.

In all three variations of the conspirators’ investment fraud scheme, victim-investors were promised returns of approximately 10% to 20% over periods as short as several weeks. Stachniw and Throgmartin allegedly received millions of dollars from the scheme, despite putting little to none of their own money into it, court records show.

A status conference for co-defendant Mark David Ray has been set for Feb. 23.

Stachniw and Throgmartin were convicted after a trial in August 2022.

An indictment alleges that Stachniw, Throgmartin, and Ray perpetuated an investment fraud scheme that solicited hundreds of millions of dollars from victim-investors, who gave money on the conspirators’ false promises that the investment money would be used for legitimate business activity related to cattle or marijuana. They concealed from victim-investors that their money was being used either to repay other investors in a Ponzi-style investment scheme, or to enrich themselves.

On Feb. 2, 2020, Ray, of Denver, Colorado, pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud. Ray allegedly, between December 2014 and continuing through about March 2019, conspired to defraud more than 10 victims throughout the United States – including the Central District of Illinois – by inducing them to send money to him under the false pretense that he would use the victims’ money to purchase cattle, which, after a short period of time, he would resell at a profit, according to court documents.

Instead of using his victims’ money as promised, Ray allegedly diverted the money to fund operations at multiple businesses he owned and operated. To perpetrate and conceal the fraud, Ray over time allegedly also used his victims’ money to re-pay money that he had fraudulently obtained from other victims in a Ponzi-style scheme, court documents show.

On Feb. 2, 2020, Ray pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud. Ray was released on bond pending his sentencing, court documents say.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division made the announcement. The Federal Deposit Insurance Corporation Office of Inspector General and the FBI investigated the case. Assistant Chief Scott Armstrong and Trial Attorney Brandon Burkhart of the Justice Department’s Fraud Section are prosecuting the case.

A 71-year-old Galesburg woman was sentenced Friday to seven years in federal prison, a Ponzi scheme attorney told Local 4 News.

According to court documents and evidence presented at trial, Reva Joyce Stachniw (whose last name also is listed as Hennefent in some public records) and Ron Throgmartin, of Buford, Georgia, ran a Ponzi scheme from late 2017 until early 2019 by fraudulently representing to victim-investors that their investments were backed by short-term investments in cattle and marijuana.

Throgmartin was convicted by a federal jury of wire fraud and conspiracy to commit money laundering.

They were involved in what court documents say was a massive Ponzi scheme that fraudulently raised money from investors across the country, according to an Aug. 26, 2022, news release from the U. S. Department of Justice,

A Ponzi scheme and the conspirators

A status conference for co-defendant Mark David Ray has been set for Feb. 23. Stachniw and Throgmartin were convicted after a trial in August 2022.

An indictment alleges that Stachniw, Throgmartin, and Ray perpetuated an investment fraud scheme that solicited hundreds of millions of dollars from victim-investors who gave money on the conspirators’ false promises that the investment money would be used for legitimate business activity related to cattle or marijuana. They concealed from victim-investors that their money was being used either to repay other investors in a Ponzi-style investment scheme, or to enrich themselves.

On Feb. 2, 2020, Ray pleaded guilty to one count of conspiracy to commit wire fraud and bank fraud. Ray was released on bond pending his sentencing, court documents say.

What is a Ponzi scheme? An expert talks with Local 4 News

An investment fraud that pays existing investors with money collected from new investors is known as a Ponzi scheme..

Scott Silver, managing partner in the Silver Law Group, with headquarters in Florida, has worked with victims of Ponzi schemes for 30 years,. He told Local 4 News that this kind of case is known as “affinity fraud.,” which happens in smaller communities. “You come in and say ‘I am one of you. I would never do my own friends and family wrong.’ She had a good name in the community. Her name carries some weight in the community.”

According to court documents, the scheme – which lasted from late 2017 until early 2019 – raised about $650 million from their victims. “A lot of mom-and-pop investors lost their fortune here,” Silver said.

The scheme was heavily concentrated in the Midwest, Silver said. “You could almost draw circles outward. It was very much word of mouth.”

The case is in receivership now. When the government finally shuts down a fraud, it appoints a receiver “to clean up the mess for the benefit of the victims,” Silver said. “It stops or stays any lawsuits that have been filed.”

Documents on the receivership website say a forensic accounting team has entered more than 6,000 transactions from investor accounts that represent more than $500 million in both inflows and outflows. In context, the forensic accounting team entered almost forty thousand transactions from the Mark Ray enterprise bank accounts that represent more than $900 million of both inflows and outflows.

In total, in absolute dollars, the forensic accounting team has entered more than $3 billion in funds flowing among and between the Mark Ray enterprise and the investors (“to be clear,” this figure represents the amount of entry completed and includes, in many cases, both sides of transactions), documents show.

Stachniw’s role in the Ponzi scheme

Custom Consulting & Product Services LLC, MR Cattle Production Services LLC, and DBC Limited LLC were businesses located in Colorado, principally owned and controlled by Ray. court records show.

RM Farm & Livestock LLC (“RM Farm”) and Sunshine Enterprises LLC (“Sunshine”) were businesses in Illinois, principally owned and controlled by Stachniw, according to court records. Universal Herbs LLC was a licensed marijuana business in Colorado, owned and controlled by the three alleged co-conspirators.

The co-conspirators directed victim-investors to make payments directly to individuals who the victim investors were falsely led to believe were the co-conspirators’ business associates, “but were in fact other victim-investors,” court records say.

“Stachniw was personally responsible for tracking the tens of millions of dollars in investments from, and payments to, victim-investors that flowed through the RM Farm account,” documents show. As the sole signatory on the account, she personally made payments to the victim-investors by mailing investors packages of blank checks bearing her signature. The co-conspirators instructed the victim-investors how to fill out the checks and when to deposit them.

To perpetuate the Ponzi-style scheme, court documents show, Stachniw advised Ray and Throgmartin generally via text message, telephone call, or email, on a near-daily basis, how much money the co-conspirators needed to raise from victim-investors to avoid overdrawing the various bank accounts the co-conspirators used, and exposing the scheme.

Documents say “At times, Stachniw expressed surprise that Ray was able to find victim-investors willing to continue to invest, for example, writing to Ray on or about August 7, 2018, ‘I can’t believe you are able to find people with money.’”