Katy man receives prison term for $17 million Ponzi scheme

HOUSTON — A 40-year-old suburban Houston man was sentenced to federal prison Tuesday for orchestrating a multimillion-dollar Ponzi scheme that took in more than $17 million from dozens of victims, the U.S. Department of Justice announced.

The defendant, identified in the release as a Katy resident, led the fraud that promised returns to investors while using new participants' funds to pay earlier ones, a classic Ponzi structure. The scheme targeted at least several dozen individual victims who collectively lost $17 million.

The sentencing marks the end of the defendant's ability to direct the operation. Prior to the conviction the scheme operated without regulatory detection until victims reported losses; the new state is incarceration coupled with a restitution order that requires the defendant to repay victims from any available assets.

The restitution process now requires the U.S. Attorney's Office for the Southern District of Texas and court-appointed officials to identify and notify all victims, calculate precise losses, and distribute recovered funds according to federal victim-witness protocols.

The conviction also triggers potential forfeiture of any assets traced to the scheme, which must be liquidated and applied to the $17 million total. Federal probation and Bureau of Prisons officials will next enforce the precise term of imprisonment and supervised release conditions.

This case forms part of the Justice Department's ongoing enforcement against investment fraud. The department's May 7, 2026 announcement details the Katy defendant's guilty plea and sentencing in U.S. District Court for the Southern District of Texas under statutes governing wire fraud and securities violations.

Similar Ponzi prosecutions in the Houston area have produced restitution orders in the eight-figure range that require years to satisfy through asset recovery and garnishment.