Ponzi scheme mastermind sentenced in $311 million scam

(Santa Ana, California-AP) May 27, 2006 - A man accused of operating one of the largest Ponzi schemes in US history has been sentenced to 30 years in prison.

James Lewis Jr. pleaded guilty to money laundering and mail fraud last October in the $311 million scam that defrauded about 1,600 people.

A federal judge also ordered him to pay $156 million in restitution, though he conceded that Lewis would not be able to.

A court-appointed receiver testified that Lewis took in $311 million between 1985 and 2003.

Lewis told investors he was earning returns of up to 40% by leasing medical equipment, financing purchases of medical insurance, making commercial loans and buying and selling distressed businesses.

But prosecutors alleged that Lewis simply used money from new investors to pay off the original ones.

Posted 7:10pm by Graeme Moore