Lindeen, Cotter To Announce $242,000 In Restitution Payments

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HELENA, Mont. – Commissioner of Securities Monica J. Lindeen will join U.S. Attorney for the District of Montana Michael W. Cotter to announce more than $242,000 in restitution payments from the state’s Securities Restitution Assistance Fund.

Lindeen and Cotter will make the announcement at Lindeen’s office on Tuesday, July 2, at 10:00 a.m.

“The assistance we’re giving today really is the last chance for a lot of Montanans to get back on their feet,” said Lindeen. “Although it’s not much compared to what they lost, these checks may just be what pays the energy bill, the credit card, or the mortgage this month for victims of securities fraud.”

Most of the $242,000 will be paid to victims of Cornerstone Financial, a multi-million dollar Ponzi scheme that started in Polson, Mont. Lindeen and Cotter worked together to shut down Cornerstone in 2009, but much of the investors’ money was already spent. Even after Cornerstone’s assets were liquidated, victims were owed millions of dollars in unpaid restitution.

Michael W. Cotter, United States Attorney for Montana said, “These defendants preyed on those in their community when they were in moments of financial necessity. Such abuse of individuals under the guise of legitimate business is a crime that will be prosecuted by the Montana United States Attorney’s Office whenever it occurs and wherever it is discovered. This prosecution sends a strong message to persons engaged in such activity that they will be prosecuted to the fullest extent of the law. This investigation, prosecution and now the recoupment of some of the lost funds is a great demonstration of the collaborative work of the U.S. Attorney’s Office, the Federal Bureau of Investigation, the Criminal Investigations Division of the Internal Revenue Service and the Montana Commissioner of Securities.”

The men behind the scheme, Robert Congdon and Keith Kovick, are currently serving time in federal prison and can’t pay back the restitution they owe. Because the investment opportunities they offered weren’t registered or backed by a legitimate securities firm, victims had no way to getting their money back.

To help victims of Cornerstone and other cases of securities fraud get their money back, Lindeen asked Montana’s 2011 legislature to create the Securities Restitution Assistance Fund. The second of its kind in the country, the restitution fund collects money from court orders, orders from the Commissioner, and voluntary contributions from firms and investment brokers who violated state securities law.

From the outset, however, unpayable restitution outpaced contributions to the fund. Since 2011, Lindeen has ordered more than $35 million in restitution for Montanans, but nearly $15 million of that restitution will likely never be paid.

In 2013, Lindeen worked with Rep. Duane Ankney (R-Colstrip) to pass legislation that directed a portion of fees collected by her office into the restitution fund, ensuring money would be available to help victims. The Ankney bill is estimated to bring in an additional $272,000 per year for the fund.