An Independence man is headed to federal prison for fraud. He took $724,000 from 13 victims, including an 88-year-old Independence resident who had invested $329,000 over several years, according to state and federal authorities.

Authorities say he used investors’ money for other business and personal expenses, including a $10,000 gift to three Hooters waitresses and another person, but when investors asked at one point in 2011, he told them there was less than $5,000 in his investment fund.

Richard J. Gumerman, 67, on Tuesday was sentenced to three years, 10 months in prison and ordered to pay $722,326 in restitution. He pleaded guilty last summer to one count of mail fraud and one count of filing a false income tax return.

State and federal authorities said Gumerman assured investors they would not lose money and they could get their money whenever they wanted but in fact has never been registered in Missouri as a broker-dealer agent, investment adviser representative or issuer agent. He told investors that his fund, the GTC Trading Fund, invested in commodities futures, but did not disclose that he had only traded in commodities in a personal account for a year – and lost money.

In pleading guilty, Gumerman admitted stealing at least $724,000 from investors from 2007 through December 2011. It was in late 2011 that several investors contacted the Missouri secretary of state’s office, which in January 2012 issued a cease-and-desist order against Gumerman, alleging misuse of investor funds. The secretary of state’s office said he had borrowed hundreds of thousand of dollars from the GTC bank account for personal expenses such as rent and expenses for his engineering business.

Those expenses included $10,000 to three waitresses at a Hooters restaurant and a clerk at another store with payments for a car, furniture and clothing.

Also at that time, the secretary of state’s office said Gumerman had sold investments for 21 years though not being registered with the state. His company, the Gumerman Trading Company, was based in Lee’s Summit.

The office of the U.S. attorney for the Western District of Missouri says individuals and groups invested more than $948,000 in the GTC Trading Fund between 1992 and 2010.

He sent investors statements with fictional balances, amounts of interest earned and rates of return. He also sent them IRS 1099 forms indicating they had earned interest in a given year when they had earned no interest, meaning they paid taxes on money they didn’t earn.

He also admitted not paying all of his own taxes for 2010, costing the government $96,635.

The investors were from Missouri and Pennsylvania. At the time of the cease-and-desist order, the secretary of state’s office said those people had put in more than $948,000, and up to $724,000 had not been repaid.

Those included an 88-year-old Independence resident who invested $329,000 over eight years and a 79-year-old Independence resident who invested $14,000 in 2006. In September 2011, Gumerman told both that his fund had less than $5,000 and he was unable to repay them but could repay them in 10 years if he continued trading.