Two Utah men who promised school districts free fitness equipment in what turned out to be a pyramid scheme must pay $39 million in restitution -- after serving lengthy prison terms, a federal judge in Minneapolis ruled on Friday.
Pyramid schemers get prison time
Two men, who promised free fitness equipment to Minnesota schools, also must pay $39 million in restitution.
December 10, 2007 at 2:07AM
U.S. District Judge Joan Ericksen sentenced Cameron J. Lewis, 36, to 17 years in prison for his role as the head of the conspiracy. She sentenced his father, J. Tyron Lewis, 65, to 5 years, 8 months. They were each held liable for the restitution.
The Lewises were convicted a year ago by a jury in Minneapolis on five counts of mail fraud, nine counts of wire fraud, one count of bank fraud and one count of money-laundering conspiracy. Cameron Lewis also was convicted of a money-laundering charge.
Cameron Lewis had been chief executive of a nonprofit organization called the National School Fitness Foundation; Tyron Lewis was its chairman and helped finance the operation.
Prosecutors said that the Lewises sacked taxpayers in a classic Ponzi scheme. They arranged for more than 600 schools to acquire fitness equipment and related programs, promising to repay them for the equipment from government grants and private donations. In reality, the schools that got in early were reimbursed with the payments of those that signed up later.
At least 18 school districts in Minnesota got billed for equipment they thought they would get free.
Attorneys for the Lewises argued for leniency, saying the sentencing guidelines recommend prison terms that are disproportionate to the crimes.
Ericksen noted that if she hadn't reduced the amount of losses attributed to the scheme by half, both men would be facing recommendations of life in prison. But she agreed that the recommended sentences were nonetheless too long.
The guidelines suggested that Cameron Lewis should spend 27 to 33.75 years in prison, and that Tyron Lewis should spend 17.5 to 21.8 years.
In sentencing Tyron Lewis, she said that although he had been chairman of the nonprofit's board, he was not the mastermind. Ericksen noted that he has had a long track record of doing good works. "Still, you have to go prison," she said.
Dan Browning • 612-673-4493
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