A federal judge in Omaha has ordered those behind an alleged Ponzi scheme that cost investors about $4.7 million to pay roughly $10 million in penalties.
U.S. District Judge Laurie Smith Camp imposed the penalties against Elite Management Holdings, MJM Enterprises and the two individuals who ran them, Michael Kratville and Jonathan Arrington.
The penalties are part of a 2011 lawsuit filed by the federal Commodity Futures Trading Commission. The commission says investors lost $3 million in participants' funds and more than $1.5 million in investments was misappropriated. The companies involved closed in 2007.
Kratville and Arrington are both facing federal criminal charges related to the case.
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors, rather than from profit earned by the individual or organization running the operation.
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