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April 23, 2009


(HOUSTON) - A former stock broker has been sentenced to prison today for defrauding investors, acting United States Attorney Tim Johnson has announced.

Mark Douglas Montana, 43, formerly of Lake Jackson, Texas, pleaded guilty in January 2008 to mail fraud. Per the terms of his plea agreement, Montana will serve a 135-month prison sentence and pay restitution to the victims of the scheme. This morning, U.S. District Judge Keith P. Ellison accepted that agreement, imposed the 135-month prison term and ordered Montana pay more than $11 million in restitution to the victims.   

Montana did business as a registered representative associated with Crown Capital Securities Ltd. through M & M Financial Inc., a corporation Montana created and controlled. Montana admitted that between 1999 and September 2004, he made false material representations to induce people to invest in securities through M & M Financial. He further admitted to have misappropriated investors’ funds to pay personal expenses, such as the purchase of real estate and motor vehicles and to pay business expenses, including M & M Financial’s payroll. Montana also admitted he used investors’ funds to pay other investors who liquidated their accounts or who received periodic payments, which Montana termed “dividends” and “principal withdrawals.”

As part of the scheme, Montana told investors he would pool funds to purchase blocks of securities at a discount, use his expertise in the securities markets to earn investors 10 to 15 percent annual returns and that their funds would be safe. He then prepared sham periodic “account statements,” which purported to summarize securities transactions for individual investors and to track the value of their investment portfolios. The sham statements were mailed to investors, leading them to believe that Montana was buying and selling securities and earning them returns as he had represented, when in fact he was not.

Montana’s prosecution was the result of an investigation conducted by the Texas City office of the FBI and the Fort Worth Regional Office of the U.S. Securities and Exchange Commission. Assistant U.S. Attorney Stephen L. Corso prosecuted the case.



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