A Kalispell man pleaded guilty Thursday in District Court to felony embezzlement and securities fraud related to a Ponzi scheme through which he bilked three people of nearly $200,000.

Donald Chouinard will be sentenced Feb. 24, 2011, after his admission of guilt that followed the negotiation of a plea agreement with the Flathead County Attorney’s Office.

He initially pleaded innocent during an arraignment in January.

Prosecutors are recommending a 10-year suspended sentence for Chouinard, a sentence that would include 30 days in the Flathead County Detention Center to be served on 15 consecutive weekends.

If District Court Judge Katherine Curtis accepts the agreement, Chouinard also would be responsible for paying $200,000 in restitution and $20,000 in fines.

He was mostly silent during the Thursday hearing in District Court. Deputy County Attorney Katie Shulz asked if he thought he could repay the money.

“Yes, I do,” Chouinard said.

In return for his guilty plea, prosecutors agreed to dismiss three additional felony counts of securities fraud.

Chouinard, a former independent broker for LPL Financial Corp., was charged after an investigation by the Montana Securities Department that began when his clients reported possible misappropriation of their funds.

According to court documents, Chouinard convinced one investor to obtain a $100,000 loan and invest with him because he could guarantee a 40 percent return in 30 days.

Instead of investing the $100,000 in the day-trading program, Chouinard used $50,000 to pay off a previous investor, deposited $25,000 into his personal joint-checking account and gave the remaining $25,000 to his attorney.

In the Flathead Valley, Chouinard was accused of misappropriating a total of $187,400 from three victims.

State regulators alleged Chouinard made unauthorized trades on customers’ accounts during the five years he worked as an independent broker for LPL Financial Corp., causing customers to lose money and generating nearly $250,000 in commissions for himself.

LPL Financial paid $1.3 million in restitution and a $150,000 fine in that case, which resulted in no criminal charges against the company but did not protect Chouinard from legal liability.

Chouinard was fired in May 2009. The Ponzi scheme was orchestrated between September 2008 and June 2009, according to court documents.

He could have faced a maximum penalty of 10 years in prison and a $100,000 fine.