Reed Diehl, a former University of California lineman has been sentenced to 57 months in federal prison for his role in a $5 million Ponzi scheme. What’s with all these people getting away with Ponzi schemes?  Anyhow, 57 months in prison, $5 million take, equals a wage of $87,720 a month. Seems like a light sentence for stealing that much money.

According to an FBI press release in July of this year:

SANTA ANA, CA—A former player with the Tennessee Titans pleaded guilty this afternoon to federal fraud charges related to a $5 million Ponzi scheme in which he collected funds with promises of high rates of returns on investments in loan programs, including multimillion dollar condominium projects in Mexico.

Reed Kyle Diehl, 30, of Coto de Caza, pleaded guilty this afternoon in United States District Court to three counts of wire fraud and one count of money laundering.

According to a plea agreement in the case, Diehl falsely represented himself to potential clients as a banker who made “hard money loans” to businesses or individuals. Diehl also admitted that he fraudulently collected deposits for lines of credit for people who desired financing for construction and development projects in Mexico.

In relation to the “hard money loans,” Diehl told investors that he would pool their funds and make secured loans to individuals or businesses that had shortterm cash needs. Instead of using investor funds to make loans, he used investors’ money to repay earlier investors and to fund his lifestyle.

In relation to the second part of his scheme, Diehl told victims involved in construction projects in Mexico that he could secure multimillion dollar lines of credit. Diehl told one victim that it would cost $1.175 million to secure a $24 million loan and that the deposit would be used as collateral for the line of credit. The victim eventually paid Diehl $2.5 million, money that Diehl used to pay, among others things, other people who had made investments with Diehl. None of the victims ever obtained a line of credit through Diehl.

In his plea agreement, Diehl admitted that he caused losses of just over $5 million.

Diehl pleaded guilty before United States District Judge David O. Carter, who is scheduled to sentence the defendant on September 28. At sentencing, Diehl faces a statutory maximum sentence of 20 years in federal prison for each of the three counts of wire fraud and 10 years in prison for the money laundering count.

Diehl was initially charged and arrested in this case in March 2008. After being freed on bond, Diehl’s bond was revoked in January after he attempted to enter into a real estate transaction for a $3.5 million house using a false name and someone else’s social security number.

The investigation into Diehl was conducted by the Federal Bureau of Investigation.

Remember, if you are promised high returns on your money that seems too good to be true, yep, run for the hills.