Terry Kretz, 61, the former chief executive officer of Hanover Corporation, has been sentenced to serve 14 years in prison and ordered to pay nearly $15 million in restitution for orchestrating an $18 million ponzi scheme.

Terry Kretz, 61, the former chief executive officer of Hanover Corporation, has been sentenced to 14 years in prison and ordered to pay nearly $15 million in restitution for orchestrating an $18 million ponzi scheme.

According to court documents, Kretz – of Gallatin, TN – offered clients the opportunity to invest, between January 2004 and August 2006, in Hanover through promissory notes bearing high interest rates.  

“Kretz told clients that their money would be used for specific purposes, such as investing in stock options and startup companies,” the US Department of Justice said. “In fact, however, more than half of the money invested in Hanover went to repay earlier investors, to pay Hanover’s salaries and overhead and to fund personal luxuries, including Kretz’s purchase of a $600,000 residential building lot, a $176,000 contribution to a church, and golf memberships.”

Kretz’ co-conspirators, Daryl Bornstein, a Hanover salesman, and Robert Haley, Hanover’s chief financial officer, previously pleaded guilty to similar charges and are scheduled to be sentenced on August 25, 2014, the DoJ said.