Summary: On Wednesday, former lawyer Charles Bennett pleaded guilty in Manhattan federal court to securities and wire fraud. For five years, he ran a $5 million Ponzi scheme, and he confessed to the crime in a detailed suicide note.
Charles Bennett’s story didn’t end the way he wanted it to. On November 3, 2014, the Manhattan lawyer jumped into the Hudson River, hoping to end his wild high-rolling life. He left behind a 16-page suicide note at his hotel entitled “A Sad Ending to My Life,” which chronicled in detail his Ponzi scheme that defrauded $5 million from 30 investors.
To Charles’ good and bad fortune, he was rescued by a NYPD scuba diver and subsequently arrested in the Southern District after police obtained the suicide note confession. On Wednesday, the now 57-year-old Bennett pled guilty to one count each of securities fraud and wire fraud in the Southern District. Judge Taylor Swain presided over the case.
Bennett faces up to 20 years in prison when he is sentenced on March 17, according to Reuters. The case was prosecuted by Assistant U.S. Attorney Amy Lester. The SEC is represented by Andrew Calamari.
Julia Gatto of Federal Defenders of New York represented Bennett, who had stated he was too broke to hire his own attorney.
Bennett was previously a lawyer with Skadden, Arps, Slate, Meagher & Flom. According to his suicide note, he had systematically preyed on his family and friends for years, promising them dividends when in reality never making a single trade.
“I have systematically over the course of five years or so perpetrated a huge Ponzi scheme envelloping[SIC] my family and closest friends,” Bennett wrote. “I managed to completely squander the hard earned money that my family and dear friends managed to set aside over the course of their working lives. To be clear about this: the whole . . . investment scheme that so many thought was real was in fact a complete and [SIC]fiction of my crazed imagination.”
The New York Daily Post wrote that Bennett initially used the investors’ cash to sustain a luxury lifestyle. He would take out money to enjoy fancy vacations and nice hotels.
The Securities and Exchange Commission investigated Bennett’s confession and found that he lured victims by telling them former governor Eliot Spitzer was one of his clients. Bennett knew Spitzer’s now ex-wife, Silda Wall, because they had worked together at Skadden.
When details of Bennett’s deception broke the news, Wall was sympathetic but Spitzer was angry that his name was used in the scam. He called for Bennett to be prosecuted “aggressively.”
