Illinois hedge fund manager sentenced to 6 years in Petters’ $3.7B Ponzi scheme case

Ill. hedge fund manager gets 6 years in fraud case

ST. PAUL, Minn. — A Chicago area hedge fund manager has been sentenced to six years in prison for his role in the $3.7 billion Ponzi scheme allegedly orchestrated by Minnesota businessman Tom Petters.

Forty-five-year-old Gregory Malcolm Bell of Highland Park, Ill., pleaded guilty last October to one count of wire fraud and was sentenced Thursday.

Prosecutors say Bell’s hedge fund, Lancelot Investment Management, invested all its money in the Ponzi scheme. He admitted making sham money transfers to make it look like Petters Co. Inc. was repaying investors. Prosecutors say Lancelot raised more than $200 million from 43 new investors based on false representations that PCI was sound.

Petters is serving a 50-year sentence but is appealing his conviction.