A Trafalgar man who state investigators said operated a shell company that collected $1.6 million in investments from residents pleaded guilty to three felony charges Monday.
Martin D. McClary, 47, 8716 S. County Road 250W, pleaded guilty to three of the 23 charges he was facing in the case.
Those felony charges include one charge of securities fraud involving a person 60 years or older, a Class B felony, and two Class C felony charges of broker-dealer violations and securities fraud.
Under the terms of a plea agreement, McClary will serve four to 20 years in prison. The court can sentence McClary to between six and 20 years for the B felony, and between two and eight years for each Class C felony.
All of the sentences will be served at the same time, meaning the maximum amount of time McClary can serve is 20 years, according to the agreement.
Johnson Circuit Court Judge Mark Loyd also can set a restitution amount, which McClary would be required to pay back, during the sentencing.
McClary is set to be sentenced Dec. 19. His attorney, James Voyles, was not available Monday.
In 2012, McClary was charged with 23 felonies, including securities registration violations, broker-dealer violations and securities fraud, after investigators said he collected at least $1.6 million in investments and promised investors big returns, such as for guaranteeing the money would earn at least 18 percent interest or that their initial money would double in one year.
A total of 33 people invested with McClary, most of whom were from Johnson County.
McClary told investors the money was going toward buying stakes in a Florida medical malpractice insurance company called Prosidian, which was started by Parry Wayne Clark, of Jacksonville, Fla. McClary and Clark received the investments between 2008 and 2010, but the company was never licensed in Florida. McClary also set up a real estate company in 2010 and asked residents to invest in that company as well.
McClary told investors the company was doing well and they were making gains on their investments, prompting some to invest more, according to court documents.
Investigators said the money instead was disbursed to McClary, Clark and other investors and used for payments, such as credit cards.
Clark also was charged with 23 felonies, and his case is set to go to trial in February, according to the court.
As part of the plea agreement, McClary agreed to testify in the case against Clark.
Four Johnson County families also have filed a civil suit against McClary and Clark, saying they had lost their entire investment. That case has been moved to Morgan County, with the next attorney conference scheduled for March, according to the court.