Bennett Convicted on Some Counts
NEW YORK (AP) _ Businessman Patrick Bennett was convicted Tuesday of perjury and obstructing a federal investigation of his company but a jury deadlocked on more serious charges alleging he orchestrated the biggest pyramid scheme in U.S. history.
Prosecutors had charged Bennett with swindling more than 22,000 investors out of $700 million, but the jury did not reach a conclusion on those charges after the two-month trial in U.S. District Court in Manhattan.
Instead, the jury said it was deadlocked on those charges despite a plea by Judge Thomas P. Griesa to continue deliberating.
``After considering the court’s appeal to try once more to find some ground for agreement on the disputed counts, we have been unsuccessful,″ the jury said in a note.
Robert Khuzami, chief of the securities and commodities fraud unit of the federal prosecutor’s office in Manhattan, said prosecutors will retry Bennett on all counts on which the jury did not reach a verdict.
Prosecutors had accused Bennett of using Bennett Funding Group to cheat investors in 46 states by enticing them to invest in leases for office equipment that sometimes had been bought with cash or did not exist.
Bennett then lined his own pockets with more than $13 million and used some of it to buy Vernon Downs racetrack near Syracuse, prosecutors said. They alleged he also ordered that tens of millions of the company’s money be spent on gambling ventures, including $19 million for a gambling barge.
Bennett testified on his own behalf during the trial, admitting that he lied to the Securities and Exchange Commission after the watchdog agency began investigating the company in 1993.
The lies, prosecutors said, stalled the SEC until March 1996, causing investors to lose hundreds of millions of dollars.
But Bennett said he never intended to defraud investors.
``Pat Bennett did not intend to defraud the investors of Bennett Funding Group,″ his lawyer, Mark Gombiner, said in closing arguments.
``He told you that he lied to the SEC. He admitted those lies to you and he is prepared to pay the consequences for them,″ Gombiner said.
Bennett was convicted of perjury, obstruction of justice and conspiracy to obstruct the SEC investigation. He faces up to five years in prison on each of the charges.