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Tuesday, June 25, 2024 | Back issues
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SEC Says Ponzi Man Jumped Into River

MANHATTAN (CN) - A New York City attorney defrauded people of "at least $5 million" in a nationwide Ponzi scheme, then jumped into the Hudson River, the SEC claims in court.

The SEC sued Charles A. Bennett, 56, on Dec. 12 in Federal Court.

It claims that in a scheme that lasted until Bennett jumped into the Hudson River in November, he defrauded more than 30 people - "most of whom were his law clients, family members or friends" - out of at least $5 million.

On Nov. 4, the SEC claims, "Bennett wrote a lengthy hand-written note admitting to his fraudulent conduct, which he left in a Manhattan hotel room. He then jumped into the Hudson River and was later rescued by a law enforcement scuba diver."

The scheme began in 2008, the SEC says. It claims Bennett "lured investors" by offering them "purported interests" in an alleged pools of funds that invested in joint ventures with a family-owned investment fund in Wyoming, with whom he falsely claimed a long-standing relationship. He claimed the money would be invested in European real estate mortgage-backed securities or credit default swaps that would earn 6 to 25 percent returns quickly, the SEC says. He also claimed that a former governor of New York was in on the deal, according to the SEC.

"But the entire story was a sham," the SEC says in the complaint. "Although the fund exists, Bennett, an acquaintance of the fund principal, never had any connection to it; nor did he ever invest any investor proceeds in any joint ventures associated with the fund, or in any investments at all. Nor was Bennett engaged in any joint venture with the former governor or any other individuals, or engaged in any investment ventures whatsoever, even on his own account."

He "secretly misappropriated" nearly the entire $5 million and spent it on himself, and to make some Ponzi payments, the SEC says.

It seeks disgorgement, penalties for securities violations and an injunction.

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