[ by Melanie Gretchen ] Flint, MI, resident Gregory McKnight pled guilty to SEC civil charges that he operated $72 million Ponzi scheme involving at least 3,000 investors from at least 50 states and several foreign countries.  He now faces criminal charges for the scheme, which could bring him a 20-year prison sentence if found guilty. SEC Findings and Allegations. From December 2005 through November 2007, McKnight, through his company, Legisi Holdings, offered fraudulent, unregistered securities, that drew investments of $72 million.  Investors were told their funds would be invested in various investment vehicles and would earn investors as much as 15% interest per month.  In reality, the SEC alleged that McKnight invested less than half of the offering proceeds and those investments lost millions. McKnight used much of the funds on Ponzi payments to earlier investors and on personal expenditures - in violation of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Emergency Action. On 5/5/08, the Court issued orders freezing McKnight’s assets and those of several companies he controlled;  a Receiver also was appointed.  On 7/6/11, the Court entered a final judgment in the SEC's action against McKnight, ordering him to pay $6.5 million in disgorgement, prejudgment interest and civil penalties. Criminal Charges. On 2/14/12, the U.S. Attorney’s Office for the Eastern District of Michigan filed criminal charges against McKnight.  For his crimes, McKnight faces a potential maximum penalty of 20 years in federal prison.  His sentence will be determined at a future date. The case: SEC v. Gregory N. McKnight, et al.: 08-cv-11887 (E.D. Mich.). For further details, go to [SEC Litigation Release 22269, 2/24/12].