Eastern Montana Man Gets 40 Years in $2 Million Ponzi Scheme

Judge Michael Hayworth sentenced 62-year-old Richard Brandt on Monday on six felony counts

By Dillon Tabish

MILES CITY — A Montana man convicted of embezzling $1.9 million from 18 people he convinced to invest in his “house flipping” business has been sentenced to 40 years in prison and ordered to pay restitution.

U.S. District Judge Michael Hayworth sentenced Richard Brandt on Monday to 60 years in prison with 20 years suspended on six felony counts including theft by embezzlement, fraudulent practices, scheming to exploit elderly people and running a pyramid scheme.

State prosecutors said Brandt, from Miles City in eastern Montana, told people they were investing in a business in which he would buy, remodel and sell homes in Nebraska and Missouri.

Victims testified about the stress they suffered after losing life savings. Brandt apologized, saying he never intended to hurt anyone.

But Judge Michael Hayworth said the crimes from January 2011 to June 2015 required planning, juggling and manipulating and that Brandt located new victims when his current plans did not work. The fraud was not exposed until one victim was being thrown out of a nursing home because Brandt had embezzled about $90,000 from her bank account, prosecutors said.

Darvin Leidholt said he invested with Brandt to buy a house for himself and his mother, who needed a home without stairs due to balance issues, the Miles City Star reported.

Leidholt testified he had a mild heart attack when the deal fell through and his mother later fell down the stairs in her house, leading to her death and his second heart attack.

Brandt “knew I had wanted to get another house where she would be safe,” Leidholt said. “His disregard for me and anybody else is just terrible.”

Gary Glasgow testified he lost his retirement savings and now suffers from severe stress-related headaches.

“He lied to me. He was deceitful. He’s a con artist and I think he would do it again,” Glasgow said.

Public defender Joe Zavatsky said Brandt, 62, did not have the experience required to start his business and never planned to defraud anyone.

Hayworth said Brandt did not cooperate in identifying his assets available for restitution. A pre-sentence investigation found Brandt failed to list assets in his wife’s name.

Brandt apologized, saying he is physically and emotionally drained.

“It was never my intent to hurt anyone, they all know that, but the end result is terrible,” Brandt said. “I’ve ruined their lives, I’ve ruined my life. That’s not what we set out to do.”

Hayworth said it was not clear where the money went. Prosecutors said Brandt spent $1.7 million on vacations and other purchases, while Zavatsky said Brandt did not live lavishly.

Brandt listed about $80,000 in assets recoverable to repay victims, said Kyle Schmauch, spokesman for the state auditor and securities commissioner. The commissioner’s office paid about $380,000 to victims from its restitution fund.

“Every investor was elderly, mentally impaired, or otherwise vulnerable to exploitation,” state Auditor Matt Rosendale said in a statement. “Every victim was a personal friend or acquaintance of Brandt. It’s incredibly important that Montanans be very careful when they invest, even if it’s with someone they know and trust.”

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