A pair of Florida-based hedge fund managers was sentenced to prison for their connection in the $3.65 billion Ponzi scheme of former Minnesota businessman Tom Petters.
Minnesota news outlet Star Tribune reported Bruce Prevost and his partner David Harrold were sentenced to 7.5 years and five years, respectively. Harrold received a shorter sentence due to his “cooperation and substantial assistance” to the government’s investigation of the Petters case after his arrest.
Prevost and Harrold each pleaded guilty in 2011 to securities fraud for misleading investors about the specifics of their investment with Petters’ operation from 2002 until 2008 when it collapsed. The pair lost about $720 million of clients’ money, and collected over $58 million in fees and commissions.
Petters’ $3.65 billion Ponzi scheme, which got him a 50-year prison sentence, was taking investor money that was supposed to be placed in funds investing in asset-backed paper, the assets being large-ticket appliances. But the transactions and the paper turned out to be fictitious.
Prevost apologized to his investors, family and family at his sentencing Friday.
“I feel a crushing guilt inside. I wasn’t honest and I wasn’t fair to you and I am sorry for your pain and your loss.”