Onetime Chicago hedge fund manager Gregory Bell was sentenced Thursday to five years in prison for his role in attempting to prop 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. .
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 U.S. District Judge Richard Kyle took note of Bell's cooperation in the Petters investigation and determined that his assistance warranted a lesser sentence.
"Once he made that decision [to cooperate], he made it fully," said assistant U.S. Attorney John Docherty. "But it was a serious offense. ... He knew this was wrong. Real people have lost real money."
Docherty said the government determined that investors with Bell and his Lancelot hedge fund lost between $205 million and $210 million.
Bell, who has been in custody for more than a year, was dressed in an oversized sweatshirt and sweatpants. He cried and wiped his nose with a tissue after completing his statement to the court. "I am so very sorry," Bell said.
According to charges, 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 as the scheme was running.
