MOBILE, Alabama – A federal jury Friday delivered a resounding victory to prosecutors who accused three men of orchestrating a multimillion-dollar Ponzi scheme based on a computer program's supposed ability to game the markets.

After deliberating part of Thursday and Friday, the jury convicted Stephen Merry, David Petersen and Yaman Sencan of conspiracy to commit fraud, fraud through interstate transactions and 18 counts of wire fraud.

Stephen Richardson, the special agent in charge of the Mobile office of the FBI, praised the verdict.

“This investigation has dealt a serious blow to the threat posed to innocent investors by fraudsters and scam artists who prey on their victims and ultimately impact the financial stability of all Americans,” he stated.

Chief U.S. District Judge William Steele allowed the defendants to remain free until a March 24 sentencing date but added a requirement that they be on house arrest with electronic monitoring. The defendants each face a maximum of 20 years in prison, although the actual punishment likely will be less under advisory sentencing guidelines.

Attorney Dennis Knizley, who represented Sencan, estimated that the guidelines will call for a sentence in the 5- to 6-year range. He said he was disappointed by the verdict.

“In a case like this, guilt and innocence is not always black and white. There’s a lot of gray,” he said. “The government has awesome power. And in this case, a good man was crushed by that power.”

Peter Madden and Patrick Finnegan, attorneys for Merry, declined to comment after the verdict.

During the trial, which started Friday of last week, prosecutors put on evidence that a handful of well-heeled investors put up $4.7 million on the promise that a sophisticated computer algorithm guaranteed large returns with little or no risk.

By the time investors opted to cash out in January 2012, much of the money was gone. Along the way, investors recouped about $2 million in payouts designed to make them believe the investment was working.

According to testimony, a fourth defendant – Timothy Durkin – told investors he developed the trading system with billionaire New York real estate mogul Arthur Cohen and a Russian named Alex Karpov. Durkin left the country before a federal grand jury indicted him and was not tried this week.

The in-house counsel for Cohen testified that the real estate titan was in partnership with Karpov and Durkin but abandoned it after it became clear the computer program did not work.

Attorneys for the other defendants argued that Durkin was responsible for the fraud and that they had no knowledge of it.

Merry, according to testimony, was living in Fallbrook, Calif., when he formed Westover Energy Trading Partners in New York in 2008. Durkin was managing partner of the firm.

Peterson, of Omaha, Neb., served as a trustee and accountant of another company formed by Merry, Reno, Nev.-based Ramco & Associates. Sencan, of San Diego, invested in both companies and solicited other investors.

Three of those investors live in the Mobile area: Todd McCain, a Citronelle contractor and several family members; Michael Spellmeyer, a Grand Bay contractor; and Dr. Mike Lee, a Mobile physician who lives in Daphne.

A Pace, Fla., contractor, Bill Abrams, also invested money and referred the Alabama residents to Sencan in October 2009.

The government alleged that the defendants told investors that Westover had developed an “arbitrage system” that exploit small price fluctuations between similar or identical stocks on different exchanges by making thousands of trades a day. Prosecutors likened it to purchasing an item for $10 and then immediately selling it for $12 – repeated thousands of times a day to build fantastic profits.

But prosecutors alleged that the supposed computer system was a fraud and that the defendants lied about making the electronic trades.

Knizley argued that his client was just as much a victim and noted that he invested his own money and his son’s money in the system. He said he would seek leniency at sentencing based on the fact that Sencan was the least culpable of the defendants and did not initiate the fraud.

Knizley said, though, that his client faces the possibility of enhanced punishment because he testified at the trial. Prosecutors frequently seek stiffer penalties for obstruction of justice when defendants testify untruthfully.

The practical effect, Knizley said, is that defendants take a risk that they will receive longer prison sentences if they testify and lose.

“It has a tremendous chilling effect on your right testify on your own behalf,” he said.

Updated at 2:26 p.m. to include reaction for FBI Special Agent in Charge Stephen Richardson.