MINNEAPOLIS (AP) — Federal prosecutors say a St. Anthony, Minnesota man has pleaded guilty to defrauding investors of more than $19 million.
Fifty-five-year-old Tyrone Herman entered his plea Friday in U.S. District Court.
According to court documents, Herman claimed he could purchase small appliances from manufacturers and wholesalers at below-retail market rates. He told victims he could re-sell the inventory and they would get their money back, with a 30 percent rate of return, within 90 days of the sale.
Prosecutors say Herman created false invoices to show he had sold the goods. When victims asked for their money back, he provided fake bank statements showing the Internal Revenue Service had frozen the account.
Herman repaid some investors with Ponzi-type payments, but not from inventory sales.
At least 25 investors were defrauded.
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