Former CEO sentenced for Ponzi scheme
NASHVILLE, Tenn. (AP) - The former chief executive officer of Hanover Corporation has been sentenced to 14 years in prison and ordered to pay $14,784,983.75 in restitution for orchestrating an $18 million Ponzi scheme.
U.S. District Judge Todd J. Campbell handed down the sentenced on Friday.
Federal prosecutors say that between January 2004 and August 2006, 61-year-old Terry Kretz of Gallatin, Tennessee, offered clients the opportunity to invest in Hanover through promissory notes bearing high interest rates.
Kretz told clients the funds would be used for stock options and startup companies.
Prosecutors say more than half of the money went to repay earlier investors, to pay Hanover's salaries and overhead and to fund personal luxuries.
Kretz' co-conspirators, Hanover salesman Daryl Bornstein, and Chief Financial Officer Robert Haley are scheduled for sentencing August 25.