Polson man pleads guilty to federal charges in Ponzi scheme

MISSOULA — A former Polson man accused of operating a Ponzi scheme has pleaded guilty to federal charges of mail fraud, wire fraud and money laundering.

Robert J. Congdon, 61, entered his pleas Wednesday before U.S. Magistrate Judge Jeremiah Lynch in Missoula.

Sentencing was set for June 7. The plea agreement calls for a $1.3 million judgment against Congdon.

The state began investigating Congdon, Keith Kovick and their business, Cornerstone Financial Inc., in late 2008 after investors complained they were no longer receiving monthly payments.

Congdon has said Cornerstone received a 10 percent commission for pairing investors with borrowers who had projects to finance. Cornerstone raised more than $14.3 million from at least 100 investors and made about $1.3 million in commissions, prosecutors said.

“It was a win-win for us, for the borrowers, for the lenders,” Congdon said in 2009. “I was a hero through 2006, even into 2007. People were extremely happy with their returns.”

The deputy insurance commissioner said the agency didn’t hear a complaint about Cornerstone until September 2008.

Prosecutors alleged that by then, Cornerstone was operating a Ponzi scheme, seeking new investors to pay older investors and falsely telling new clients that they were secured by an interest in property worth more than the investment. In some cases, the property was worth less than the loan value, or the investments were not secured by any real property.

The state securities commissioner alleged that by January 2009, the notes were all in default and nearly all the property securing the investments was in foreclosure.

Kovick faces trial in April.