New York lawyer admitted to Ponzi scheme in suicide note

MANHATTAN -- A lawyer who authorities say attempted suicide to evade prosecution for a $5 million Ponzi scheme was arrested Friday at the hospital where he has been recovering since he was pulled from the Hudson River off Manhattan over a month ago.

Charles A. Bennett, 56, a former corporate lawyer at a New York City-based law firm, was permitted to remain free of shackles at Roosevelt Hospital after his attorney, Julia Gatto, made a passionate plea that he be freed on his own recognizance while he continues his recovery from physical and psychological injuries stemming from his Nov. 3 suicide attempt.

Assistant U.S. Attorney Amy Lester argued unsuccessfully that Bennett be held without bail during an unusual remote court appearance in which the prosecution and Magistrate Judge Kevin N. Fox spoke into a cellular telephone from Manhattan federal court as Gatto and Bennett did the same from his hospital room.

Lester said Bennett's fraud from at least 2008 until last month was revealed in a 16-page handwritten suicide note. She said he had cheated at least 30 friends and family members out of millions of dollars, sometimes entire life savings.

"This defendant has already demonstrated he's willing to take a great risk - some might say he took the ultimate risk - to avoid facing prosecution by attempting to commit suicide," Lester told Fox.

Bennett, charged with wire and securities fraud, also was charged civilly by the Securities and Exchange Commission, which said Bennett promised returns of up to 25 percent and claimed prominent individuals including a former New York governor were participating in his investment ventures.

In a statement, former Gov. Eliot Spitzer called the scheme "a horrific act by someone who pretended to have a relationship that did not exist and who lured unwitting investors into a Ponzi scheme."

Spitzer's ex-wife, Silda Wall Spitzer, said in a statement: "We worked together at Skadden Arps. This is astonishing and heartbreaking on all counts."

Gatto argued vigorously that Bennett not be shackled to his bed. She said he had suffered anxiety and depression and felt remorse. She said he had swallowed a lot of water, had undergone surgery and suffered pneumonia soon after he was transferred to a psych ward.

"I'm worried that this man is going to have a terrible setback," she said, adding that even bail-hearing talk of being shackled to his bed without bail had noticeable effects. "I can see my client's blood pressure rising, his breathing becoming more shallow."

After New York City police rescued Bennett, officers recovered a handwritten suicide note signed by Bennett titled: "A Sad Ending to My Life," a criminal complaint said.

The complaint said Bennett confessed he solicited money from friends to meet his own financial obligations and admitted using money to pay personal expenses and investors.

Gatto said Bennett wants to await trial in Minnesota with his mother.