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Texas Fund Boss Admits $31 Million Fraud in Mea Culpa Email

Andres Guerra Luz
·2 min read

(Bloomberg) -- The boss of a small Texas-based investment firm said he has closed the business and called in federal investigators after admitting to fraudulent actions that led to the loss of almost all the money under management.

Chris Bentley, the founder and chief executive officer of Bellatorum Resources LLC, said in a telephone interview Thursday he’s working with the U.S. Federal Bureau of Investigation and Department of Justice.

While Bellatorum is a relative minnow in the investment world, having raised $31 million for its most recently active funds, the nature and apparent candor of Bentley’s confession is startling. In a 1,361-word email dated April 9, he told investors their money is essentially gone, and that he is solely responsible for wrongdoings that include the doctoring of records and using investors’ capital to cover operational expenses.

“I want to do everything in my power before I go to prison to try and help the investors recoup as much of their money as possible,” Bentley said in the interview. “No matter where I end up, I want to live a life I’m not ashamed of anymore.”

Reuters earlier reported Bellatorum’s closing and some of Bentley’s admissions. A spokesperson for the FBI said it cannot confirm or deny the existence of an investigation.

Bellatorum targeted the acquisition of mineral rights in Texas shale basins. It started with a fund involving a single investor, after which four other funds were launched between 2017 and 2018. All five returned double-digit gains, Bentley said.

However, while going out and trying to raise capital for 2019, he said he neglected the marketing side of the business, which was how deal flow was generated previously. That led to overpaying for assets and making deals that were less than arms-length, leading to deteriorating fund performance.

To hide the business troubles from investors, Bentley said he hid information from stakeholders and in 2020 tried to raise $100 million through his eighth and final fund. He ended up only raising $2.7 million, of which most went on overheads, he said.

“I no longer own a home or any personal assets. I had to lever or sell those and use that money to cover overhead as well,” Bentley wrote to investors in the April 9 email. “I sacrificed everything, family, friendships, and capital ... because I believed I could make everything right in the end.”

(Updates with FBI response in the fifth paragraph. A previous version of the story corrected the spelling of Bellatorum in the third paragraph.)

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