Bentley Guilty In Massive PonziScheme
PHILADELPHIA - (03/07/05) -- A former investment advisor who soldphony CDs to hundreds of credit unions and banks pleaded guiltyFriday to one of the biggest Ponzi schemes ever. Robert Bentley,head of the now defunct Bentley Investment Services, pleaded guiltyto fraud in a scheme that bought and sold more than $4 billion ofCDs that Bentley portrayed as FDIC-insured but were, in fact, justpaper IOUs he wrote out to his customers. More than 100 creditunions bought into the scheme and have so far been left with about$50 million in losses, including lost principle and interest. Butreceivers appointed by the Securities and Exchange Commission saidthey have paid out more than 90% of the $350 million in claims sofar--the biggest SEC receivership ever--and hope to add to thatpayout in the coming years. Most of the money coming into BentleyFinancial went to pay off early investors in the classic Ponzi, orpyramid scheme way, but millions more went to finance a lavishlifestyle for Bentley. Authorities said his tiny investment companyin the Philadelphia suburb of Paoli, had a golf pro on staff andBentley indulged himself in many other ways, snorting cocaine,betting heavily on sports and buying $90,000 worth of Cuban cigarsa year to smoke or give away. Bentley, 46, faces up to 30 years inprison when he is sentenced later this year.