Sentences were handed down Wednesday for three central Nebraska people who swindled nearly 200 victims in a $16 million investment scheme. The case involved the now-defunct First Americans Insurance Services company of Grand Island.
Stella Levea, 55, and James Masat, 67, of Grand Island were both sentenced to 97 months in prison and Kenneth Mottin, 56, of St. Libory received a sentence of 5 years from United States Senior District Judge Richard G. Kopf.
In addition, they are jointly and severally liable to pay restitution to the 192 victims in the amount of $16,607,263.85.
All three were convicted of mail fraud.
According to U.S. Attorney Deb Gilg, First Americans Insurance Services operated in Grand Island. From 2003-08 and previously, FAIS raised funds, in part by borrowing from private individuals.
Gilg said the lenders were told that a portion of the loaned money would be used to buy collateral in the form of an annuity which would grow in value, thereby insuring the lender would be able to recoup at least the principal loaned to FAIS. However, the defendants failed to purchase annuities as promised, using the money instead for other business and personal purposes.
In total, the defendants borrowed more than $27 million from private individuals with promises to secure those loans with an annuity. Some repayments were made, resulting in the restitution order for $16.6 million, Gilg said.
On Aug. 17, 2007, Masat and Levea on behalf of FAIS agreed to a Department of Banking prohibition on borrowing of ‘new money’ from private lenders.
However, between Aug. 17, 2007 and Jan. 12, 2009, while prohibited from borrowing by the Department of Banking moratorium, FAIS continued to borrow an additional $31.68 million in ‘new money’ loans from private lenders.
Gilg said FAIS filed for bankruptcy on Jan. 12, 2009 and no longer operates.
This case was investigated by the Federal Bureau of Investigation, the Nebraska State Patrol, the Nebraska Department of Banking and the Nebraska Department of Insurance.