GRAND RAPIDS, MI – Trent Francke, a key player in an alleged $46.5 million Ponzi scheme, has pleaded guilty to federal charges and agreed to testify against his partner, David Wilson McQueen.

Both are Byron Township residents and the biggest targets of the federal investigation.

Victims across the state said the scheme destroyed lives. Life savings wiped out. Retirement funds gone.

Francke and McQueen had backgrounds in insurance and real-estate, and recruited insurance agents with established clients to bring in new investors, who trusted the agents. They also targeted church-going folks who would trust them as Christian men.

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The insurance agents “funneled tens of millions of dollars into the scheme orchestrated by McQueen and Francke,” Assistant U.S. Attorney Matthew Borgula said in court documents.

Most of the money taken in was not invested, but used for Francke and McQueen’s personal expenses, and pay returns to earlier investors who believed their investments were paying off. When money was actually invested, the investments led to “catastrophic losses,” Borgula said.

The government said McQueen used others’ money for a Fort Lauderdale condo, his and hers Harley-Davidsons and a $24,000 engagement ring.

Francke and McQueen were indicted in 2011.

Others followed, including two who have pleaded guilty to charges.

Francke stood before U.S. District Judge Gordon Quist and pleaded guilty to one charge of conspiracy to sell unregistered securities, or securities fraud, and two counts of failure to file an income-tax return.

The securities fraud carries a maximum penalty of five years in prison, $250,000 in fines, three years on supervised release. The income-tax charges are punishable by up to one year in prison, a $100,000 fine, one year on supervised release.

Francke will also have to pay the cost of prosecution, and any taxes, interest and penalties owed the U.S.

The plea agreement says that McQueen, with assistance from Francke and others, operated several investment funds: Accelerated Investment Group, or AIG, International Opportunity Consultants, IOC, Diversified Liquid Asset Holdings, DLAH, and Diversified Global Finance.”

Investors put about $46 million into the funds, after Francke and McQueen and others said the money would be invested in forex trading, real property, ethanol-related projects and others. Francke admitted that he knew he and others sold investment plans without a prospectus or literature showing the nature of investments or risks.

The plea agreement said Francke and McQueen were told by attorneys they should not sell investments without written disclosures.

Francke also agreed that “neither (Francke) nor anyone else ever disclosed to investors that McQueen used investor funds to pay McQueen’s salary of $100,000 per month or (Francke’s) salary of approximately $35,000 per month.”

The agreement also says Francke’s wife, Kristine Francke, won’t be charged.

He will be ordered to pay restitution.

John Agar covers crime for MLive/Grand Rapids Press E-mail John Agar: jagar@mlive.com and follow him on Twitter at twitter.com/ReporterJAgar