FARGO, N.D. — The wife of a man convicted of bilking millions of dollars out of people in North Dakota, South Dakota, Minnesota and elsewhere in an investment fraud scheme cannot collect proceeds from his insurance policy, a federal judge ruled Monday.

Verlin Swartzendruber, of Laredo, Texas, was sentenced in 2010 to five years in federal prison after pleading guilty to one count of wire fraud. He was ordered to pay back about $3.2 million, and court documents show he still owes about $2.2 million.

His wife, Lois Swartzendruber, filed a motion in federal court asking to keep about $10,000 in insurance proceeds, primarily to cover eventual burial costs for her husband, who has battled health problems. She said the money should be excluded from restitution because the law considers her an innocent spouse.

In denying the claim, U.S. District Judge Ralph Erickson wrote that he's sympathetic to her financial hardship, but she's the primary beneficiary, not the owner, of the policy.

"Not only has Lois not identified a valid exemption, she does not have an ownership interest to protect," Erickson said.

Nick Chase, assistant U.S. attorney in North Dakota, said he was pleased with the ruling.

"As I stated during the hearing on this, I am sympathetic to Ms. Swartzendruber's situation," Chase said. "However, I am also sympathetic to all of the victims of Mr. Swartzendruber's fraud scheme."

EJ Hurst II, attorney for the Swartzendrubers, said Monday that hadn't "fully reviewed" Erickson's orders and had not spoken with his clients.

"I can say that our immediate concern in Verlin's health," Hurst said.

In April, Erickson signed an order recommending Swartzendruber be released for medical treatment at Vanderbilt University Medical Center for throat damage that resulted after cancer treatments. Hurst said a medical furlough has been denied by prison staff at Butner, N.C.

The government said during Swartzendruber's trial that he told investors he had unique access to international trading programs that would generate high rates of returns, when he knew that such funds did not exist. He recruited investors through promoters, who often received bonuses, court documents show.

One of the promoters, Minot commodities broker Frederick Keiser Jr., was convicted in March 2007 on 22 counts and sentenced to 12 years in prison. One of Keiser's associates, Neville Solomon, was convicted earlier this year and sentenced to more than seven years.

Federal prosecutor Brett Shasky said during sentencing in November 2012 that although Swartzendruber had a "much bigger role" in the conspiracy than Keiser, he deserved a lighter sentence because he cooperated with prosecutors.

Swartzendruber's plea agreement called for his wife to keep a $22,000 motor home, a $13,000 vehicle, a $6,000 fishing boat, her Social Security income and part of the proceeds from the Strawberry Lake Christian Bible Camp in Minnesota that the couple had been managing.

Erickson said Monday that the insurance company should write a check to the clerk of court for $9,800, the cash value of the policy.

"Through we have returned a sizable portion of losses back to the victims, there is almost no chance the victims will get all their money back," Chase said. "Sympathies aside, under the law, this asset should be liquidated for the benefit of the fraud victims."