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N.Y. Lawyer Survives Suicide Attempt After Admitting Ponzi Scheme

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By Mark Wilson, Esq. on December 16, 2014 10:57 AM

Charles A. Bennett used to be a New York corporate lawyer; he once worked at Skadden in mergers and acquisitions. Then he left a 16-page suicide note in his Manhattan hotel room in which he admitted to running a $5 million Ponzi scheme. On November 3, Bennett tried to kill himself by jumping into the Hudson River.

But he survived, thanks to a "law enforcement scuba diver." Now the SEC has filed a civil complaint, and the Justice Department a companion criminal complaint, against Bennett for his six-year Ponzi scheme.

Some Swampland to Sell You in Transylvania

Most of the "clients" of the scheme were friends, family members, or legal clients, according to the complaint. Bennett claimed to have a relationship with a Wyoming-based family that would be "investing in European real estate mortgage-backed securities or credit default swaps" with a return of between 6 and 25 percent (!!).

Well, Heathcliff's ghost is more real than these investments, which were entirely fake. (Who would want a stake in Wuthering Heights, anyway? It's so dark and brooding. And Baskerville Hall has that hound problem.)

Actually, that's not quite true. The Wyoming fund was real, and Bennett had met its principal before, but Bennett had no other connection to it. Rather than invest in that European real estate, Bennett took investors' money and lavished himself with "vacations, expensive hotels, and substantial cash withdrawals."

The Beginning of the End

Being that this is a Ponzi scheme, Bennett had to recruit new investors, whose principal would pay off the old ones. That's when this Jenga tower started to collapse, as investors' demand for a return exceeded Bennett's ability to pay. By August 2014, the SEC complaint asserts, Bennett had to start passing knowingly bad checks in an attempt to stave off requests from people who wanted their money -- sometimes as much as $500,000.

All of this culminated in the November 3 suicide attempt and note. Bennett's 16-page handwritten note, titled "A Sad Ending to My Life," admits that it was all a Ponzi scheme and that he had never invested so much as a dime of the money his clients gave him into any investment fund. At a bail hearing last Friday, a federal judge allowed Bennett to remain in the hospital pending his release.

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