Kovick pleads guilty to Cornerstone Ponzi Scheme

MISSOULA — In a federal court session in Missoula on April 25, 2012, Keith B. Kovick pleaded guilty for his role in the Polson-based company, Cornerstone Financial Inc., which defrauded investors in Montana’s largest Ponzi Scheme.

Kovick and his business partner, Robert J. Congdon, laundered more than $1.7 million through accounts with Whitefish Credit Union, Valley Bank and First Citizens Bank. They were exposed when the scheme collapsed in 2008, by the end of which they were unable to make interest payments to investors because there were no new investors.

Kovick originally pleaded not guilty to the charges during an initial hearing Nov. 29, 2011. In a plea agreement filed April 18, Kovick admitted to 19 counts of mail fraud, wire fraud and money laundering. He is currently released on special conditions.

Sentencing is set for July 26, 2012. Each fraud charge carries a maximum of 20 years imprisonment, a $250,000 fine and three years of supervised release.

Congdon pleaded guilty to mail fraud, wire fraud and 14 counts of money laundering Feb. 22, and faces the same penalty on each of his 16 counts. His sentencing is scheduled for June 7.