FORT WORTH - Three thousand-plus people with millions of dollars invested in Cornerstone Prodigy Group won't get any money back for at least three more months, maybe longer.

But the legal troubles of Gary and Sandra Reeder, the Fort Worth couple who federal officials say operated Cornerstone as an illegal Ponzi scheme, could soon be over.

A proposed settlement of the government's lawsuit against the Reeders and Cornerstone has been submitted to the Securities and Exchange Commission in Washington, D.C., for approval.

Terms of the settlement have not been made public, but Hal Degenhardt, director of the SEC's Fort Worth district office, said yesterday that the Reeders will not be required to pay a fine or make any restitution because they have no assets left.

That doesn't sit well with Christa Sexton, a Lago Vista woman who is still out more than $18,000 of the $25,000 she invested in Cornerstone. "This guy walks away free. ... What's the message out of that?"

But Degenhardt said the Reeders submitted sworn documents showing that they have no assets of any significant value. Their home, cars and bank accounts have all been turned over to the court-appointed receiver, who is liquidating them to raise cash to pay back investors.

Any government fine levied against the Reeders, Degenhardt said, would come from the Cornerstone assets, leaving less for investors.

"I could never justify doing that," he said. "I will not ever benefit the government over investors."

Gary Reeder, when asked about the settlement, said that in essence the SEC is dismissing the charges against him. He said that the government backed down because he had shown that it acted illegally in seizing Cornerstone's assets and that he agreed to the settlement so investors could get their money back sooner.

The settlement does not require the Reeders to "either admit or deny" the SEC's allegations, Degenhardt said, but he took strong exception to Reeder's characterization. "A dismissal denotes that he is exculpated (free of blame) from the charges, and that's far too strong a word," Degenhardt said.

If the SEC commissioners approve the settlement, it must also be approved by U.S. District Judge Terry Means, who is hearing the case.

The Reeders could still face criminal charges. The U.S. attorney's office has reportedly been conducting its own investigation. "This is the sort of conduct that should interest criminal authorities," Degenhardt said.

On Nov. 24, the day before Thanksgiving, the SEC sued the Reeders, charging them with running a Ponzi scheme to defraud investors, and obtained a court order to shut Cornerstone down and seize all of its assets.

In a Ponzi scheme, investors are paid with money received from new investors and not from the profits of any ongoing business. The Reeders have repeatedly denied that they ran a Ponzi scheme.

The receiver, Dallas lawyer Mike Quilling, told Means yesterday that he still hopes to pay investors by the end of June but that a dispute over claims by credit card companies could stall the payments.

Quilling said he has accumulated close to $7 million, after selling off the Reeders' house, cars and a few hundred thousand dollars in coins. But until the court determines how much the credit card companies will be entitled to, he can't divvy the rest up among investors.

Quilling asked the judge to set a late-May deadline for the credit card companies to submit their claims and documentation.

"As the court is aware," he said, "I get phone calls, the court gets phone calls, from people with gut-wrenching stories" about the financial hardships they're enduring, including possibly losing their homes, because their money is tied up in Cornerstone.

Many Cornerstone clients made their contributions via credit card, and a large number have demanded refunds from the banks that issued the cards.

Jeffrey Weisserman, a Detroit attorney representing Superior Bankcard Services, told Means that the company estimates that it handled $5.5 million in Cornerstone payments by Visa and MasterCards and that it has paid out about $900,000 in refunds.

Weisserman said that, because of rules in credit card agreements and federal law, the banks need to allow several more months for card holders to contest their payments to Cornerstone before a complete accounting can be made.

Bob Cox, (817) 548-5534 rcox@star-telegram.com