The SEC announced yesterday that on September 28, 2009, U.S. District Judge Virginia A. Phillips sentenced 65-year-old Richard M. Harkless to 100 years in federal prison. Harkless’s sentence is believed to be the longest ever imposed in a white collar crime in the Central District of California. Harkless was convicted in July of three counts of mail fraud, three counts of wire fraud, and one count of money laundering.
Harkless was charged with orchestrating a multi-million dollar Ponzi scheme between 2000 and late 2003. The SEC states that
Harkless and his sales agents fraudulently induced investors nationwide to invest in Mx Factors’ notes, which purportedly paid a “guaranteed” return of up to 14% every two to three months. Mx Factors claimed that it would use the investor funds to provide its clients – construction contractors, wholesalers, and manufacturers – with accounts receivable financing. Instead, Harkless operated a Ponzi scheme and skimmed investor funds to finance a Mexican crab fishing business, pay personal expenses, and fund overseas bank accounts.
Read the SEC’s Litigation Release.
