Recent securities fraud 50 times more costly than Bennett's pyramid scheme:
Wall Street's newest alleged con man, Bernard L. Madoff, has apparently eclipsed Syracuse scammer Patrick R. Bennett, by billions.
Madoff's securities fraud, exposed Dec. 11, was estimated at $50 billion worldwide.
Bennett's crime, exposed in 1996, totaled $1 billion swindled from 12,000 investors in and 10,000 creditors of his family's companies. At the time, prosecutors called it the biggest Ponzi scheme in American history.
Now, if proven, Bernie Madoff's scam would claim that dubious distinction. In fact, his alleged scam is being called the largest in the history of the world. Small investors, institutions, hedge funds, global banks and pension funds all fell victim.
In Madoff's case, his own family turned in the 70-year-old former Nasdaq Stock Market chairman, to the Securities and Exchange Commission after he confessed his pyramid scheme to them. Through his investment firm, Bernard L. Madoff Investment Securities LLC, he allegedly paid redemptions to previous investors in certain funds with the money he collected from new investors. Last week he finally admitted "it was all a big lie," according to the SEC.
In Bennett's case, his own family nearly went down with him after the Syracuse-based Bennett Funding Group was accused of selling investors leases for equipment that didn't exist and sometimes selling the same lease over and over again to different investors.
His father, E.T. "Bud" Bennett, faced federal charges. His wife, Gwen, was pressured to sell the family home. His brother, Michael, pleaded guilty to aiding the scam. A $600,000 yacht named after his mother, Kathleen Bennett, "The Lady Kathleen," was targeted for sale by the bankruptcy court.
The Bennetts' holdings included the Hotel Syracuse, the Quality Inn, a Maine shopping mall, office equipment, campgrounds, gambling barges, a casino and Vernon Downs Racetrack.