Firm’s founder says he lost clients’ money
The boss of a small Texasbased 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 CEO of Bellatorum Resources LLC, said in a telephone interview Thursday the he’s working with the FBI and the Justice Department.
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. Spokespeople at the FBI and the Justice Department didn’t immediately respond to requests for comment.
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 doubledigit 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 raising only $2.7 million, of which most went on overhead, 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 email. “I sacrificed everything, family, friendships, and capital ... because I believed I could make everything right in the end.”