Ex-fund manager Bell gets 5 years in Ponzi case

By McClatchy Tribune Newspapers
Posted Sep. 30, 2010 at 6:44 p.m.

Onetime Chicago hedge fund manager Gregory Bell was sentenced Thursday to five years in prison for his role in propping up the Tom Petters Ponzi scheme as it began to unravel more than two years ago.

A tearful Bell apologized to his family and his former investors for the “pain and shame” he caused them. He also asked U.S. District Court Judge Richard Kyle to allow him “to return to society” as a productive individual.

Bell pleaded guilty to one count of mail fraud in 2009 and faced a maximum sentence of 20 years in prison.

But both federal prosecutors and Kyle noted his cooperation in the Petters investigation and determined that warranted a lesser sentence.

Bell allowed his hedge fund to be used by Petters to make it appear that Petters was paying various promissory notes to investors when he wasn’t. Bell didn’t tell his investors about the fraud and allowed new investors to join his hedge fund while it was going on.

Bell’s sentence will be reduced by 14 months to give him credit for time served in a county jail after his bail was revoked when prosecutors deemed him a flight risk.

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