PHILADELPHIA -- A last minute appeal by defendants in the Bentley Financial Services case could stall any future money distribution to those affected by a widespread Ponzi scheme started by the defunct firm.

In 2001, the Securities and Exchange Commission filed a complaint against Bentley and Entrust Group alleging that the defendants claimed to be selling bank-issued, federally insured certificates of deposits that were actually uninsured securities. Hundreds of credit unions, banks and individuals invested more than $370 million with the defendants. Since then, Peninsula Bank, Joseph Marzouca and Ted Benghiat, Southeastern Securities, Inc. and SFG Financial Services, Inc. have been named as defendants. Robert Bentley, who ran Bentley Financial pled guilty to two counts of wire fraud and one count of bank bribery, is currently serving five years in prison and was ordered to pay $3.25 million in fines.

In June 2006, a federal jury in Philadelphia returned verdicts against Peninsula and Benghiat for damages totaling more than $32 million. The defendants appealed to the U.S. Court of Appeals for the Third Circuit, which issued an order on March 20 setting forth a schedule for the appellants and David Marion, the court-appointed receiver with law firm Montgomery, McCracken, Walker & Rhoads LLP, to file a series of briefs and replies/responses regarding the issues on appeal. A final consolidated reply to the Third Circuit is due to be filed by the receiver by July 16 after which it will require an oral argument.

The appellants have retained new counsel for the appeal and have now filed motions in both the District Court and the Third Circuit which the receiver believes are without merit and were filed to delay the appeal, according to Marion.

"The expense and uncertainty of the outcome of these post-trial proceedings is a major factor rendering it impossible to forecast the timing or amount of any future distribution to the claimants, the receiver said.

As of March 21, nearly $340 million has been returned to claimants but the latest court wrangling may hold up any further distributions, according to Marion. The receiver is still holding assets of approximately $10.1 million in liquid investments, primarily interest-bearing institutional funds invested in U.S. Treasury obligations and U.S. government agency obligations. The remaining unpaid claims total approximately $32 million.