Personal Finance > Investing
Bennett gets 30 years
April 28, 2000: 6:22 p.m. ET

Federal judge also orders executive convicted of giant Ponzi scheme to pay $109M
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NEW YORK (CNNfn) - A federal judge Friday sentenced former Bennett Funding Group executive Patrick Bennett to 30 years in prison after a jury convicted him of 42 counts of money laundering and fraud that wiped out investors' life savings.

United States District Judge John Martin Jr. in New York also ordered Bennett, 47, who was convicted on June 10, 1999 of defrauding more than 10,000 people through the Syracuse, N.Y. firm his parents founded in 1980, in a giant Ponzi scheme, to pay $109 million in fines back to investors. Many of those investors, retirees and others, lost all their savings in the scheme.

Bennett, the former chief financial officer and board member of the company, has been in federal custody since his conviction following a four-week trial, Mary Jo White, the U.S. Attorney for the Southern District of New York said. The jury found him guilty of two counts of securities fraud, five counts of bank fraud, 30 counts of money laundering and five counts of engaging in financial transactions in criminally derived funds.

Bennett and his wife Gwen, have two children.

In an earlier trial, a jury convicted Bennett of two counts of conspiracy to commit obstruction of justice and perjury, four counts of perjury and one count of obstruction of justice.

Judge Martin had offered to sentence Bennett to 20 years if agreed to turn over certain assets including a 100-acre horse farm in Oneida, N.Y., but when he failed to do that, Martin sentenced him to 30 years.

But that's still a far cry from the life sentence Martin could have imposed.

There is no possibility for parole in the federal court system. Bennett's lawyer, Michael Pinnisi, said his client would appeal the decision.

"Today's sentence is one of, if not the, longest sentence imposed in a white-collar case and appropriately reflects the magnitude of Bennett's crimes, and the devastating impact these crimes have had on victim-investors," White said.

During the trials, prosecutors persuaded the juries that Bennett illegally raised capital for his office equipment financing company by soliciting $600 million from investors for bogus sales of equipment leases, White said.

Bennett kept the scheme going for six years, from 1990 to 1996, by raising money from new investors to repay earlier investors.

The jury agreed with evidence that Bennett concealed the scheme by laundering more than $1 billion in cash he illegally obtained from investors through accounts held in the name of the Bennett Management & Development Corp.

He was also convicted of several fraudulent accounting and transaction practices.

Bennett had filed for bankruptcy protection on March 29, 1996, the day he was arrested.

At his first trial, Bennett lied under oath about an investigation into his company by the U.S. Securities and Exchange Commission between 1994 and 1996. Back to top