LINCOLN, Neb. (AP) — One of three former Grand Island-based insurance agents accused of defrauding more than 250 investors out of $29 million has pleaded guilty and agreed to help prosecutors.

The Grand Island Independent ( ) reports that Kenneth Mottin, of St. Libory, pleaded guilty to mail fraud last week.

Mottin, Stella Levea and James Masat were the principals of First Americans Insurance Service, which had been under investigation since a 2009 bankruptcy filing.

Nebraska Attorney General Jon Bruning compares First Americans' alleged fraud to a Ponzi scheme in which investors are promised unusually high returns and early investors are paid out with money from later investors.

Mottin said he would cooperate with prosecutors and testify against his former business partners. Levea and Masat have pleaded not guilty, and they are scheduled to return to court on July 5 for a status conference on the case.

Masat's attorney, Tom Dahlk, declined to comment. Levea's attorney, Clarence Mock, did not immediately respond to a message Wednesday morning.

Mottin, Masat and Levea were indicted in late 2010 on 25 counts, including conspiracy, mail fraud and insurance fraud. Maximum sentences for the charges range from five to 20 years in prison. As part of Mottin's plea agreement, prosecutors agreed to drop the other charges against him at his Sept. 6 sentencing hearing.

Prosecutors say Levea and Masat, both of Grand Island, and Mottin solicited investments from private lenders who were told their money was backed by secure annuities, according to the indictment.

Instead of buying annuities, prosecutors said the three used the money to support their business and personal expenses.

First Americans, incorporated in 1980, had touted services to American Indian tribes in more than 20 states before it failed. The former insurance company isn't related to First American Corp., a Santa Ana, Calif.-based provider of title and specialty insurance and business information.


Information from: The Grand Island Independent,