Hedge Fund Manager Gets Six Years In Petters Case

Oct 1 2010 | 3:37am ET

Hedge fund manager Gregory Bell has been sentenced to six years in prison for his role in helping Thomas Petters cover up a $3.65 billion Ponzi scheme.

Bell, the founder of Highland Park, Ill.-based Lancelot Investment Management, pleaded guilty to wire fraud last year. The 45-year-old could have been sent away for as many as 20 years.

According to prosecutors and the Securities and Exchange Commission, Lancelot steered nearly all of the $2 billion it raised to Petters. Bell and Petters are accused of cooking up a series of bogus payments to cover up Petters’ delinquency on more than $130 million in allegedly phony notes sold by Petters to Lancelot. Bell was also accused of raising $200 million from investors on false pretenses about Petters’ business.

Petters was sentenced to 50 years in prison after his conviction last year.

Harold Katz, vice president of finance and accounting at Lancelot, has yet to be sentenced for his role. He faces up to five years.

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