A St. Charles man and his out-of-state business partner received federal prison sentences of more than three years each for defrauding 125 investors out of roughly $6.6 million.
Roderick Rieman, 69, was sentenced to four years in prison after pleading guilty to mail fraud. Prosecutors said Rieman and his partner, 55-year-old Michael Crook, of Los Angeles, lied to investors and misappropriated funds to make "Ponzi-type" payments to some investors. Crook, who cooperated with federal authorities, received a 3½-year sentence.
Prosecutors said Rieman operated an insurance and investment business in St. Charles called Innovative Financial Services Inc. that offered investment opportunities in Crook's Las Vegas-based business ventures, which included interactive kiosks, prepaid debit cards and restaurant reservation software.
Between 2004 and 2007, the two men misrepresented returns on investments and risks associated with the investments, prosecutors said. For example, the men offered and sold investments in the kiosks and promised returns of 18 percent in monthly payments and repayment of principal in 36 months. Though the pair sold 250 investments in these kiosks, only a small number were ever built and none were successfully placed in operation and no revenues were generated.
Rieman was ordered to begin serving his sentence May 27. Crook will report to prison June 24.