NASHVILLE - Two former Hanover Corp. employees have been sentenced in connection with an $18 million Ponzi scheme.
The U.S. Justice Department said the former chief financial officer, 55-year-old Robert Haley of Lebanon, Tennessee; and the former salesman, 55-year-old Daryl Bornstein of Kinston Springs, Tennessee, were sentenced to 70 months and five years in prison, respectively, and ordered to pay $14.4 million in restitution.
Hanover's former chief executive officer was sentenced earlier this month to 14 years in prison and ordered to pay $14.7 million in restitution.
According to court documents, Bornstein and the former CEO, Terry Kretz, used some funds from new investors to repay earlier investors, for salaries and overhead and to benefit the defendants. The Justice Department said Haley sent new investors' money to earlier investors as "interest" and prepared a false balance sheet.