A former investment advisor who sold phony CDs to hundreds of credit unions and banks has pleaded guilty to one of the biggest Ponzi schemes ever.
Robert Bentley, head of the now-defunct Bentley Investment Services, pleaded guilty to fraud in a scheme that bought and sold more than $4-billion of CDs that Bentley portrayed as FDIC-insured but were, in fact, just paper IOUs he wrote out to his customers. More than 100 credit unions bought into the scheme and have so far been left with about $50 million in losses, including lost principle and interest.
But receivers appointed by the Securities and Exchange Commission said they have paid out more than 90% of the $350 million in claims so far-the biggest SEC receivership ever-and hope to add to that payout in the coming years. Most of the money coming into Bentley Financial went to pay off early investors in the classic Ponzi, or pyramid scheme way, but millions more went to finance a lavish lifestyle for Bentley. Authorities said his tiny investment company in the Philadelphia suburb of Paoli, had a golf pro on staff and Bentley indulged himself in many other ways, snorting cocaine, betting heavily on sports and buying $90,000 worth of Cuban cigars a year to smoke or give away.
Bentley, 46, faces up to 30 years in prison when he is sentenced later this year.
