Hedge Fund Manager Indicted In Petters Remains Jailed; Trial Delayed

Jul 17 2009 | 1:39am ET

Gregory Bell, the Illinois hedge fund manager charged with helping cover up a multi-billion Ponzi scheme, remains in jail despite winning bail, as the alleged mastermind of that fraud won a delay in his trial.

Thomas Petters, the Minnesota hedge fund manager and businessman who has been charged with orchestrating a $3.5 billion fraud, will go on trial on Oct. 26. Petters’ lawyers sought the delay, from the original trial date of Sept. 14, to give them more time to sift through the roughly 6 million pages of evidence produced by prosecutors.

But U.S. District Judge Richard Kyle warned that this delay would be the only one, and gave Petters’ lawyers a week less than they sought.

Petters has pleaded not guilty.

Bell, who runs Lancelot Investment Management, won a $1.5 million bond agreement. U.S. Magistrate Judge Jeffrey Keys in St. Paul, Minn.,  rejected prosecutors’ argument that Bell, who was born in Russia, is a flight risk, but ordered electronic monitoring. Kaye then ordered Bell held pending an appeal of his bail decision.

Bell put up interest in his Highland Park, Ill., home to satisfy the bail requirements.

Federal prosecutors and the Securities and Exchange Commission have charged Lancelot and Bell with facilitating Petters’ alleged fraud. According to the SEC complaint, Lancelot steered more than $2 billion to Petters, and last year helped him cover up his Ponzi scheme with a series of fraudulent transactions.


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