A Wisconsin man entered into a plea agreement with prosecutors admitting that he masterminded a Ponzi scheme that defrauded investors, including his brother, out of at least $3 million. Eric Schmickle, 37, indicated that he planned to plead guilty to a single charge of wire fraud, which carries a maximum sentence of twenty years in federal prison along with a $250,000 fine. However, Schmickle will likely serve much less than the maximum, with federal sentencing guidelines calling for a sentence in the range of 57 to 71 months in prison. The plea agreement also calls for Schmickle to pay $2.9 million in restitution to his victims.
According to prosecutors, Schmickle promised to trade commodity futures contracts through his companies, Q Wealth Management and Aquinas. Friends and family members gave him $300,000 to start in 2009, with the understanding that Schmickle would be entitled to 25% of any investment profits. Schmickle claimed to achieve substantial gains, which attracted additional investors who contributed a total of approximately $4.2 million. However, Schmickle admitted that any reported gains were untrue, and in reality, he racked up trading losses that exceeded $3 million when the scheme was uncovered earlier this year. Investor funds were also used for a variety of Schmickle's personal expenses. According to authorities, only a few thousand dollars remained when the scheme came to light.
As part of his obligation to pay restitution, Schmickle agreed to turn over various bank accounts and title to his home in Bolivar, Missouri. It is unknown whether the assets will satisfy the $2.9 million restitution order. Schmickle's sentencing date is unknown.