N. Dakota man pleads guilty in Ponzi scheme

The second of two men accused of running the biggest Ponzi scheme in Montana history pleaded guilty to mail fraud, wire fraud and 17 counts of money laundering during federal court proceedings in Missoula Wednesday.

Keith B. Kovick, 61, of Williston, N.D., and Robert J. Congdon, 61, formerly of Polson, created Cornerstone Financial Inc. in May 2000 and used it to create a fraud scheme using the sale of unregistered securities at least from January 2005 to January 2009.

The pair laundered more than $1.7 million through accounts with Whitefish Credit Union, Valley Bank and First Citizens Bank. They were exposed when the scheme collapsed in 2008, by the end of which they were unable to make interest payments to investors because there were no new investors.

Kovick originally pleaded not guilty to the charges during an initial hearing Nov. 29, 2011. He changed his plea Wednesday.

He is now facing up to 20 years in prison, three years of supervised release and a fine of up to $250,000 on each of his 19 counts. His sentencing is scheduled for July 26.

Congdon pleaded guilty to mail fraud, wire fraud and 14 counts of money laundering Feb. 22, and faces the same penalty on each of his 16 counts. His sentencing is scheduled for June 7.