Ex-Credit Bancorp Officials Will Pay $329 Million in SEC Lawsuit
Three former Credit Bancorp Ltd. officials convicted of operating an international Ponzi scheme must pay almost $329 million in a lawsuit brought by the U.S. Securities and Exchange Commission, a U.S. judge said.
U.S. District Judge Robert Sweet in New York yesterday ordered the final judgment against Thomas Rittweger, manager of North American operations for the firm, Douglas Brandon, a Kentucky lawyer who represented the firm, and Richard Blech, who was Credit Bancorp’s chairman and chief executive officer.
Rittweger and Brandon were convicted at trial in 2003 of defrauding clients, including the chairman of Vintage Petroleum Inc. (VPI), of $210 million, prosecutors said. Blech pleaded guilty before trial.
Unbeknownst to its clients, the firm operated as a Ponzi scheme, taking cash and other assets from new investors to make payments to earlier ones, creating the impression of sizable returns, prosecutors said.
In his order, Sweet, who was presiding over the SEC suit, directed that the three were liable for $218 million, representing profits from the scheme, with additional interest of $110.5 million.
According to court and U.S. Bureau of Prison records, Brandon was sentenced to 97 months in prison, Blech was sentenced to 72 months in prison and was released in 2007 and Rittweger was sentenced to serve 135 months in prison and ordered to pay more than $18 million in restitution. He is scheduled to be released from prison in 2015.
The cases are U.S. v. Blech, 02-CR-122, and SEC v. Credit Bancorp, 99-cv-11395, Southern District of New York (Manhattan).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
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