A Fayetteville man has been sentenced to nine years in prison and ordered to pay back more than $1.5 million after he pleaded guilty in U.S. District Court to a Ponzi scheme that spanned three continents and involved $6.4 million.
U.S. District Judge Jimm Larry Hendren sentenced Norman Bates Hatchett, 39, on Tuesday after Hatchett pleaded guilty in March to eight counts of wire fraud.
In addition to serving nine years in prison, Hatchett must pay a $150,000 fine and $1,568,135.06 in restitution, Hendren ruled.
According to a plea agreement, Hatchett’s scheme ran from August 2005 to March 2007. He induced victims in Pennsylvania, Australia and Singapore to give him money to invest for a 20 percent monthly rate of return or to roll the monthly interest back into the original investment, the agreement says.
The plea agreement states he used money gained from new investors to pay off those who wanted monthly payments, which is commonly known as a Ponzi scheme.
He told investors their money was in Ameritrade accounts when the money actually was put in accounts he opened in banks in Prairie Grove, Rogers and Bentonville, the plea agreement states.
Assistant U.S. Attorney Chris Plumlee said Wednesday that federal authorities learned of the scheme in early 2008 when investors called the U.S. attorney’s office to complain. He said it took the FBI about 10 months to put together the complicated case.
Plumlee said while $6.4 million was invested in total, some investors received a return on their investments while others recovered some of their losses, leaving the $1.5 million in losses for Hatchett to repay.
Northwest Arkansas, Pages 11 on 12/24/2009