A Michigan man was sentenced to four years in a federal prison after pleading guilty to using funds generated in a Ponzi scheme to gamble online.
Jeffrey Folkert, 42, from Grand Rapids was convicted and sentenced by US District Court Judge Robert Jonker, who also ordered Folkert to pay restitution of $1,313,787.
Folkert had plead guilty to mail fraud and was turned over to US Marshals after it was claimed that he violated the terms of his bond. US Attorey Christopher O'Connor also claimed that there was reasonable cause to believe that Folkert committed federal crimes while out on bail.
Folkert created the firm iStorm Solutions LLC in 2005 which operated as a computer consulting business. Shortly after, Folkert started to recruit investors, telling them that they could make money by advertising on Google. However, little money actually went to Google, and very little money was actually earned. Using other client's funds to pay dividends to other investors, Folkert then pocketed the rest of the money.
The defendant's attorney went on to say that: "Additionally, he (Folkert) spent large sums of investor money on personal expenses and online gambling."