Petters-Linked Hedge Fund Manager Pleads Guilty

Oct 8 2009 | 1:21am ET

As expected, the hedge fund manager implicated in Thomas Petters’ alleged Ponzi scheme pleaded guilty to fraud yesterday.

Gregory Bell, the founded of Illinois-based Lancelot Investment Management, pleaded guilty to one count of mail fraud in St. Paul, Minn., federal court. He admitted helping Petters engineer a series of fraudulent transactions designed to hide losses from investors and keep his Ponzi scheme going.

Bell faces up to 20 years in prison and a $250,000 fine, but he is believed to be cooperating with prosecutors.

According to the Securities and Exchange Commission, which has filed separate civil charges against Lancelot and Bell, the hedge fund steered nearly all of the money it raised—some $2 billion—to Petters’ alleged $3 billion Ponzi scheme. When that fraud began to unravel last year, the SEC says Bell and Petters cooked 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.


In Depth

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Cash: An Asset In Adolescence

Aug 31 2017 | 3:34pm ET

If the investment industry has a rebellious teenager in the house today, that teenager...

 

From the current issue of