James Fry, the former hedge fund manager convicted of helping Thomas Petters cover up his $3.65 billion Ponzi scheme, has been sentenced to 17 years in prison.
While Fry was not accused of knowing about Petters' fraud, he was found guilty of lying to investors in his Arrowhead Capital Management and the Securities and Exchange Commission about his Petters investments and the criminal history of Petters' chief fundraiser, Frank Vennes. According to prosecutors, Fry helped cover up Petters' default on notes owned by Arrowhead.
The crimes required "a substantial sentence," U.S. District Judge Richard Kyle said, and he imposed one—although he declined to send Fry away for the 25 years sought by prosecutors. Fyr's own lawyers had sought a six-year sentence.
Arrowhead clients lost $120 million in Petters' scam. Petters is serving a 50-year sentence.