CHARLOTTE, N.C. - A Colorado woman has plead guilty to conspiracy to commit wire fraud in a Ponzi scheme that prosecutors say brought in almost $7 million but paid out investors only a fraction of that.
Kristine Johnson entered the guilty plea in Federal Court in Charlotte Tuesday. She did not comment to Eyewitness News as she walked into the courtroom for the hearing before a magistrate judge, during which she admitted her role in the scheme operating as an online investment group called The Achieve Community.
IMAGES: Ponzi scheme head pleads guilty Tuesday
Prosecutors say the group raised $6.8 million between January 2014 and February 2015, when federal regulators shut it down. They say the group had more than 10,000 investors -- including some in Charlotte -- and did pay out $2.1 million to investors who were in the scheme early, but most did not get any money. They say that Johnson diverted $200,000 to herself.
Johnson could face up to 20 years in prison and a $250,000 fine. She was released on $25,000 bond Tuesday and will have to surrender her passport.
The U.S. Secret Service, which investigated the case, could not comment on the specifics of the investigation but said online Ponzi schemes are pulling in a lot of unknowing investors.
“These schemes are successful because they are complex and sophisticated,” said Martin Mulholland, acting director of Charlotte’s Secret Service office.
Mulholland said the schemes are often promising unrealistic returns that should send up warning flags.
“When you're being pitched that there's little to no risk and the return is very high, then yes, you need to be guarded and you need to be suspicious,” he said.
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