On November 3, Charles Bennett jumped into the Hudson River. He was rescued by a SCUBA diver from the NYPD and transported to a hospital.
What made matters worse for Bennett was that he left a suicide note in a West Side hotel that totaled 16 pages. It was recovered by police officers as part of the investigation.
The suicide letter was titled, “A Sad Ending to My Life.”
The letter stated the following:
“I have systematically over the course of five years or so perpetrated a huge Ponzi scheme envelloping[SIC] my family and closest friends.”
“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.”
He reportedly told investors that they were seeing amazing returns and even paid some of their “dividends.” But, it turned out that, “It was all an illusion — again not one trade was ever done. It was a Ponzi scheme pure and simple,” he wrote.
The suicide letter said that the money went “to pay off other supposed ‘investors’ and my absurd lifestyle.”
Following an investigation, it was discovered that Bennett was actually telling the truth in the letter. He has been charged with stealing $5 million from 30 clients since 2008.
A complaint filed by the Securities and Exchange Commission said he used the investors’ cash for himself. He made large withdrawals while taking vacations and staying in luxurious hotels.
He would lure investors by falsely claiming that former governor Eliot Spitzer was an investor. Bennett used to work with Spitzer’s now ex-wife, Silda Wall, at Skadden Arps.
Spitzer said Bennett “should be prosecuted aggressively.” He also described the scam as “a horrific act by someone who pretended to have a relationship that did not exist and who lured unwitting investors into a Ponzi scheme.”
On Friday night, Bennett was arraigned on securities fraud charges while still in his hospital room. The arraignment occurred over the phone.
Amy Lester, the prosecutor working the case, has asked to have Bennett held without bail because he is a flight risk.
He "already took a great risk — some might say the ultimate risk — to avoid prosecution for his crimes by attempting to commit suicide," Spencer said.
Julia Gatto is Bennett’s court-appointed lawyer. He claims he does not have enough money to pay for his own counsel.
Gatto requested that Bennett be released on his own recognizance in order to get treatment for a host of ailments.
Magistrate judge Kevin Fox ordered Bennett to remain free until he leaves the hospital. If convicted, Bennett faces a maximum of 20 years in prison.
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