Lawyer who survived leap into river disclosed 'huge Ponzi scheme' in suicide note, prosecutors say
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A former BigLaw associate was arraigned on wire and securities fraud charges remotely from his hospital room on Friday.
Charles Bennett, 56, is recovering from a collapsed lung suffered after he leapt into the Hudson River in New York on Nov. 3, report the New York Daily News, the New York Post, the Associated Press and the Am Law Daily. Police rescued Bennett and discovered a handwritten suicide note in which he confessed to “a huge Ponzi scheme,” according to a criminal complaint accusing him of soliciting more than $5 million from investors.
“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 … fiction of my crazed imagination.”
Bennett’s scheme began in 2008 when he was in solo practice, according to a civil complaint by the Securities and Exchange Commission. Press releases are here and here.
Bennett previously worked as an associate in at least two prominent New York law firms and one prominent accounting firm, according to the SEC complaint (PDF). One of the firms is Skadden, Arps, Slate, Meagher & Flom, where Bennett worked with Silda Wall Spitzer, the now ex-wife of former Gov. Eliot Spitzer. According to the SEC, Bennett falsely told some of his victims that the former governor was one of his investors.
Silda Wall Spitzer told AP the case was “astonishing and heartbreaking on all counts, while Eliot Spitzer called the allegations against Bennett “a horrific act by someone who pretended to have a relationship that did not exist and who lured unwitting investors into a Ponzi scheme.”
During the arraignment on Friday, the parties spoke on cellphones, according to the AP account. Magistrate Judge Kevin Fox released Bennett on his own recognizance, which allows him to remain hospitalized without handcuffs, according to AP and the New York Post. A bail hearing will be held 24 hours before Bennett’s release from the hospital.
