Michael Gral, a former partner in the law firm Michael Best & Friedrich has been sentenced in the Bielinski Brothers fraud and conspiracy case. Gral pleaded guilty to mail fraud for his role in the fraud perpetrated by Bob Brownell, the former CEO of Bielinski Brothers. He received two years of prison followed by probation, and will pay $4.2 million to Bielinski Brothers. The payment to the company includes $1.7 million in restitution and $2.5 million in damages, and will be paid over four years. He is the eighth person to plead guilty to participating in the fraud which cost the company at least $20 million.
James Lewis Jr., the operator of one of the largest Ponzi schemes in U.S. history was sentenced to 30 years in prison last week. That was the maximum sentence that could be imposed. He was also ordered to pay $156 million in restitution.
The sentence comes after a guilty plea to one count of money laundering and one count of mail fraud. 12 charges were dropped in exchange for the guilty pleas on these two counts.
The Ponzi scheme lasted for almost 20 years, and took in $311 million. Lewis represented to investors that he was earnings returns of 18% to 40% by investing in leased medical equipment, financing medical insurance, making commercial loans, and buying and selling troubled businesses.
In reality, Lewis was using money from new investors to pay of old investors, the classic Ponzi scheme. Some investors received money back from the scam, leaving a loss of $156 million for the later investors.
Last week’s scheduled sentencing of former Bielinski Brothers CEO Robert Brownell was postponed after he was allegedly mugged outside his home a few days prior. Federal prosecutors now say that the mugging was staged by Brownell, who had his 14 year-old son hit him with a board.
Brownell pleaded guilty to one count of conspiracy to commit mail fraud, and could be sentenced to as much as 20 years in prison and $250,000 in fines. The fraud scheme allegedly masterminded by Brownell caused losses to Bielinski Brothers estimated at $10 million.