Petters-Linked Hedge Fund Manager’s Bail Revoked

Jul 23 2009 | 2:26am ET

The Illinois hedge fund manager charged with fraud in connection with the Thomas Petters Ponzi scheme scandal won’t be freed on bail, after all.

A federal judge has decided that Gregory Bell is a flight risk and ordered him jailed until his trial on charges that he helped Petters cover up his alleged $3 billion scam with a series of fraudulent transactions. Prosecutors argued that a $15 million offshore trust in Switzerland gives Bell, a Russian native, the means to flee.

“The preponderance of evidence shows that Mr. Bell is a flight risk,” assistant U.S. Attorney Timothy Rank told U.S. District Judge Michael Davis in Minneapolis, Minn. “What really matters is that the money is there and that Mr. Bell, in a knowing, calculated way, decided to put himself in the situation.”

Bell’s attorney countered that his client doesn’t even have a passport, but to no avail.

Last week, a magistrate judge granted Bell $1.5 million bail with home monitoring, but prosecutors appealed the decision.

According to the Securities and Exchange Commission, Bell’s Lancelot Investment Management steered more than $2 billion—nearly all of the money it raised—to Petters, earning millions of dollars in “fraudulent fees.” The complaint charges Lancelot and Bell with wrongfully withdrawing more than $40 million from the five Lancelot funds—which have since filed for bankruptcy—in purported fees in the months before Petters’ alleged scam was exposed.


In Depth

The Benefits Of Private Debt Investing

May 7 2015 | 10:43am ET

Jeffrey Haas is chief operating officer of Old Hill Partners Inc., an SEC-registered...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

How To Generate 6% Yield In A Volatile World

May 22 2015 | 6:41am ET

Private credit comes in many different flavors, all with the common themes of over...

 

Editor's Note