PHILADELPHIA -- A last minute appeal by defendants in theBentley Financial Services case could stall any future moneydistribution to those affected by a widespread Ponzi scheme startedby the defunct firm.

In 2001, the Securities and Exchange Commission filed acomplaint against Bentley and Entrust Group alleging that thedefendants claimed to be selling bank-issued, federally insuredcertificates 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. andSFG Financial Services, Inc. have been named as defendants. RobertBentley, who ran Bentley Financial pled guilty to two counts ofwire fraud and one count of bank bribery, is currently serving fiveyears in prison and was ordered to pay $3.25 million in fines.

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

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

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

As of March 21, nearly $340 million has been returned toclaimants but the latest court wrangling may hold up any furtherdistributions, according to Marion. The receiver is still holdingassets 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. Theremaining unpaid claims total approximately $32 million.