SEE YA IN COURT ALL OF THE FRTIB -
YOU LIED TO CONGRESS - THE PRESS - THE 3.9 MILLION MEMBERS - ONCE YOU MAILED THOSE LETTERS THAT IS MAIL FRAUD. THAT WILL TRIGGER AN INVESTIGATION AND YES THE PENALTY IS JAIL. HOW ABOUT THIS CASE.....
In a surprising admission from the witness stand, Patrick R. Bennett, who stands accused of orchestrating one of the biggest financial frauds in American history, said yesterday that he had lied under oath and conspired to thwart a Federal investigation into his company, the Bennett Funding Group of Syracuse.
Mr. Bennett was testifying in his own defense in Federal District Court in Manhattan, where he has been on trial for two months on charges that he defrauded hundreds of investors and banks of roughly $700 million. His lawyers said the day's admissions did not affect Mr. Bennett's plea of not guilty to the more serious allegations in the case, including dozens of charges of securities fraud, money laundering and mail fraud.
Mr. Bennett was chief financial officer of Bennett Funding, which purported to be in the business of financing leases of office equipment like copiers and faxes; it also invested in hotels and various gambling businesses. But prosecutors contend that the company was fooling investors into believing that they were making a profit while it diverted the money to themselves.
About 10,000 people, many of them from New York and New Jersey and most of them retirees looking for a safe place to put their money, invested in Bennett Funding before the company collapsed in 1996.
In what lawyers watching the trial called a highly unusual admission, Mr. Bennett said that he had lied to the Securities and Exchange Commission, which began its investigation in 1993, looking into his company's financial statements and some of the securities it sold to investors. He fabricated documents and persuaded those who helped him to lie to investigators, too, he said.
''What I just admitted to was wrong, and I realize it was wrong,'' Mr. Bennett said. ''I'll explain some reasons, what went on, but it was a very bad thing to do.''
The admission by Mr. Bennett, who was flushed and teary eyed, also prompted tears from his wife, Gwen, who was sitting in the front row of the courtroom. With her were her parents and siblings, as well as her father-in-law, Edmund T. Bennett, who founded the Bennett Funding Group but has not been charged in the case. Chief Judge Thomas P. Griesa called a short recess to allow Mr. Bennett to compose himself.
When his testimony resumed, Mr. Bennett, responding to questions from his lawyer, David B. Levitt, said his reason for lying about his activities was not an intention to hide any fraudulent activities. Rather, he said, he had lied and fabricated documents to give the impression that his company had sound business practices.
He did not think that investigators would believe the truth, that he had done business ''with not much more than a handshake and a couple of documents,'' he said.
Several other people, including Mr. Bennett's brother Michael, have already pleaded guilty to charges of perjury and obstruction of justice.
Mr. Bennett's unusual admission concluded what had been a day of mostly dry testimony, which Mr. Bennett delivered in a gravelly monotone. His testimony was expected to continue today, when prosecutors are also likely to begin their cross-examination.
Describing himself early as a ''country bumpkin'' with little education or business experience whose company grew too quickly, Mr. Bennett said that he had relied on others for legal and accounting advice. He now recognized, he said, that the company had had poor controls.
His lawyer, Mr. Levitt, continued to raise questions about Kenneth Kasarjian, an associate of Mr. Bennett's who has already pleaded guilty to criminal charges and testified against Mr. Bennett. The prosecution presented 31 witnesses, and jurors received nine volumes of exhibits relating to Mr. Bennett's complex financial transactions.
Although the Bennett case has angered investors, who have been known to demand his blood at public meetings, few of them have attended the trial. Only one, who declined to give his name but said he had lost money investing with the Bennetts, appeared yesterday.
Other observers at the trial included lawyers from the Securities and Exchange Commission, a lawyer who is supervising Mr. Bennett's personal bankruptcy, and a lawyer for Richard C. Breeden, the former chairman of the commission who is serving as court-appointed trustee for the bankrupt Bennett companies and is trying to recover money for investors.
Mr. Bennett himself helped with that effort yesterday, his lawyers said, by turning over to prosecutors 1.2 million shares of a company called Equivest, which is a public company owned mostly by the Bennett enterprises. At yesterday's market price, the shares are worth more than $6.5 million. Mr. Bennett happened to find the shares while going through a box, his lawyer said.
The shares are to be turned over to Mr. Breeden, who has said he intends to sell them to the public.
