Verdict Could Bridge The Gap In BentleyFinancial Shortfall
PHILADELPHIA - (06/12/06) A federal jury last Thursdayfound a bank and securities firm liable for $33 million for theirroles in a massive Ponzi scheme committed by a local CD broker,Bentley Financial Services, that cost credit unions tens ofmillions of dollars. The finding that Peninsula Bank, of Delray,Fla., was liable for $13.1 million, and Southeastern Securities, ofMiami, was liable for $13.1 million in damages, could bridge a $30million gap between how much receivers in the Bentley case haverecovered for credit union and bank clients, making investorswholeat least for the principal amount of the $370 millioninvested with the rogue CD broker. In both cases, the jury foundthat the companies and their executives either conspired with oraided and assisted the massive Ponzi scheme. Robert Bentley,principal owner of the Paoli, Pa., broker, pleaded guilty last yearto securities fraud in the case and is serving a 55 month prisonterm. More than 120 credit union bought securities from Bentleythat were billed as FDIC-insured CDs, but were really just Bentleypromises to repay the notes, causing losses of as much as $55million in principal and interest to credit unions. Early investorsin the scheme were paid interest from payments made by laterinvestors, making it appear the investments were legitimateaclassic Ponzi scheme. The Bentley receivers have several othersuits pending in an effort to make investors in the casewhole.