Sunday, 24 July 2016
Last updated 1 day ago
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.