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Illinois investment firm exec admits to Petters-case charge

Executive with ties to Petters pleads guilty to conspiracy to commit wire fraud.

Last update: September 2, 2009 - 8:27 PM

A top accounting executive at an Illinois investment firm with ties to Wayzata businessman Tom Petters and Petters Co. Inc. pleaded guilty Wednesday to one count of conspiracy to commit wire fraud, the U.S. attorney's office said.

Harold Alan Katz, 42, a vice president of finance and accounting for Lancelot Investment Management in Chicago, entered the plea before U.S. District Judge Paul Magnuson in St. Paul. Katz faces up to five years in prison.

The plea comes as part of an agreement, the U.S. attorney's office said. In a statement, it described a scheme by Lancelot officials to misrepresent investors and potential investors about the company's investments with Petters Co. Inc. Katz admitted conspiring to make 86 fraudulent banking transactions to give the impression that Petters Co. was paying promissory notes on time, the U.S. attorney's office said. Also, it said Katz admitted creating a spreadsheet to show investors that the notes had been paid.

Lancelot founder and owner Gregory Bell was charged in July with wire fraud and money laundering. Bell, 44, is accused of defrauding investors and helping Tom Petters by moving large amounts of money to and from Petters Co. Inc.

The U.S. attorney's office is asking people who lost money investing in Lancelot to call the FBI's Minneapolis office at 612-573-6366.

VINCE TUSS

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