THREE CONVICTED OF PONZI SCHEME AFTER FOUR WEEK TRIAL

After a four week trial, a jury convicted Gail Eldridge of Marietta, Georgia, Paul Knight of Kodak, Tennessee and John Montana of Staten Island, New York on all 13 counts of an Indictment that charged the defendants with conspiracy, fraud and money laundering related to a multi-million dollar "Ponzi" scheme, announced United States Attorney Terrance P. Flynn of the Western District of New York.

Eldridge and Knight were convicted of two conspiracy counts, five counts of mail fraud, three counts of wire fraud and three counts of money laundering. Montana was convicted of the conspiracy to commit mail and wire fraud violations, five mail fraud counts and three wire fraud counts. All three defendants were ordered detained by Hon. Charles J. Siragusa pending sentencing, which was scheduled for January 2009 . Eldridge and Knight face sentences up to 260 years in prison; 20 years in prison for each count of conviction. Montana likewise faces up to180 years.

The charges stem from a "Ponzi" scheme by which the three defendant promoted a "High Yield Investment Program" which promised extraordinarily high rates of return to investors in the United States and Europe. Investors were required to invest a minimum of one million dollars. The case was brought in the Western District of New York because two of the 27 victim investors reside in the Western District of New York (Hilton, New York).

At trial, the prosecutor proved that between July 1999 and July 2001, the defendants obtained approximately 33 million dollars from investors. However, an investigation by the Federal Bureau of Investigation and the Internal Revenue Service revealed that none of the $33 million was ever invested, but rather was put to the personal use of the defendants Eldridge and Knight.

The trial jury, which deliberated 7 hours over two days, also determined that the three defendants must forfeit to the United States government over $22 million in property and cash.

This case was a joint investigation conducted by the FBI, under the direction of Laurie J. Bennett and the Internal Revenue Service, under the direction of Special Agent In Charge Patricia Haynes, Criminal Investigation Division. The case was tried by Department of Justice Trial Attorney William H. Bowne, III and Assistant United States Attorney Bradley E. Tyler.