Kovick pleads not guilty to fraud, money laundering

MISSOULA — One of two Polson men who allegedly spearheaded the largest Ponzi scheme in Montana state history pleaded not guilty to federal charges of mail fraud, wire fraud and 21 counts of money laundering during a federal court session in Missoula on Nov. 29.

According to the federal court indictment filed on Nov. 2, Keith B. Kovick and his Polson business partner, “uncharged aider and abettor” Robert J. Congdon, devised a material fraud scheme involving the sale of unregistered securities from at least January 2005 until January 2009. Through Cornerstone Financial, Inc. and K and B Investments, LLC, Kovick and Congdon are accused of knowingly engaging and attempting to engage in monetary transaction, by, through, or to a financial institution affecting interstate or foreign commerce in criminally derived property, the charging document states.

The document includes, but is not limited to, 21 counts of money laundering through Whitefish Credit Union, Valley Bank and First Citizens Bank accounts to the tune of $1,767,865.19.

If convicted, Kovick will be required to forfeit $1,767,865.19 to the United States. The original state investigation, which began in the fall of 2008, alleged the scheme involved at least 100 investors, with investments totaling more than $14.4 million on 181 unregistered securities.

“Right now we are unable to comment on any of the details of the case,” Assistant U.S. Attorney Kris McLean, the prosecutor for the United States, said.

Kovick, currently a resident of Williston, N.D., is currently released on special conditions, and awaits a preliminary pre-trial conference set for Dec. 14 in Missoula.

If convicted of these charges, Kovick faces possible penalties of 20 years in prison, a $250,000 fine and three years supervised release on each count.

The investigation was conducted by the Federal Bureau of Investigation.

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