Another player in Tom Petters' alleged $2.62 billion electronics re-sale Ponzi scheme has plead guilty, making Petters' upcoming defense all the more tricky.

Gregory Bell, a former Chicago-area hedge fund manager, admitted to one count of wire fraud and faces up to 20 years in prison, the sixth accomplice to plead guilty. Bell covered for Petters (pictured here) by making it seem that the Minnesota Ponzi schemer was repaying investments made by his fund, Lancelot Investment Management.

SEC: The Commission's Complaint alleges that Bell in turn invested almost all of these assets in notes sold by Petters, falsely assuring investors that he was taking steps to protect their money and to verify the underlying transactions. The Complaint alleges that when Petters's scheme began to unravel, Bell participated in a series of sham transactions to conceal that Petters owed more than $130 million in investor payments on the notes. Bell and Lancelot Management also withdrew more than $40 million in fees from the hedge funds during the final months before Petters's scheme collapsed.

That cover helped Petters attract massive investments from hedge funds and other institutions, ostensibly to buy consumer electronic goods and re-sell them to nationwide big-box stores. According to the government, there was no such buying and selling.

Instead, Petters funded a luxurious lifestyle, including a multi-million dollar mansions in Minnesota, Florida and Costa Rica.

Image: Minneapolis Business Journal