Bridges to plead guilty in $2.3 million fraud

Bridges to plead guilty in $2.3 million fraud

Credit: The Charlotte Observer

John Knox Bridges


by AMES ALEXANDER / The Charlotte Observer

Posted on February 8, 2012 at 6:32 PM

Updated Sunday, Nov 3 at 12:52 AM

SALISBURY, N.C. -- John Knox Bridges, the Salisbury man accused of taking money from fresco artist Ben Long, the N.C. Transportation Museum and others, has agreed to plead guilty to federal charges - and to repay his victims.

In an agreement with the U.S. Attorney's office, Bridges has agreed to plead guilty to securities fraud and money laundering. Though he has not yet been sentenced, he likely faces more than four years in prison.

Last year, federal authorities charged Bridges with running an elaborate Ponzi scheme and fraudulently obtaining more than $2.3 million from individuals and charitable groups.

Bridges, now 51, falsely told several people he would invest their money in a Texas oil company, but instead used the money for travel and personal expenses, according to the federal indictment.

In 2009, the Observer reported on allegations that Bridges made off with money from Long, the Minnesota-based Lindbergh Foundation and the N.C. Transportation Museum in Spencer.

In August, Bridges shot himself in the torso after Salisbury police responded to a report that he was suicidal. He was later discharged from the hospital. Two weeks after the shooting, a grand jury indicted him.

Bridges could face between 57 and 71 months in prison, according to federal sentencing guidelines. Authorities will seek a sentence on the "low end" of the applicable guidelines, the plea agreement says. Ultimately, though, his sentence will be up to a federal judge because the guidelines aren't binding.

He's now out on $25,000 bond.

Bridges is scheduled to appear in federal court for a plea hearing today. His attorney did not return phone calls Wednesday.

The indictment alleged that Bridges began soliciting investments to a fictitious company called "Logan Investments" in 2004. He told people their money would be invested in a company that was building a pipeline to transport liquid petroleum - and that they would receive quarterly dividends while the pipeline was constructed.

Bridges paid some investors dividends from his personal account, telling them it was from Logan Investments. But Bridges was paying those investors with money he'd received from other victims, the indictment alleged.

The indictment stated that Bridges also persuaded victims to lend him about $710,000 in 2009 after telling them another lie: That his computer had been hacked into, and that $600,000 had been emptied from his bank account.

Bridges has agreed "to pay full restitution, regardless of the resulting loss amount, to all victims," according to the plea agreement.

Sherry Austin, a writer who lives near Asheville, said she loaned Bridges $100,000, while a friend and two relatives loaned and invested well over $1 million more. She said she has no hope of getting her money back.

"What can he do to repay our money?" asked Austin, who grew up near Bridges in Charlotte's University City area and attended the historic Back Creek ARP church, where Bridges' father was a minister. "Who's going to hire him?"

In 2009, the Observer told the story of how Bridges befriended Ben Long, an artist well-known for his massive frescos, and volunteered to manage his business affairs. Long and his son later sued Bridges, alleging he took more than $800,000 of the artist's money through a series of false claims.

The board of the Lindbergh Foundation, a nonprofit group named for aviator Charles Lindbergh, removed Bridges as president in 2009 after concluding he had misused $600,000. Bridges has since repaid the money.

But the first time Bridges tried to return that money, he got it from another nonprofit he helped direct - the foundation that supports the N.C. Transportation Museum. The Rowan County museum got its money back, and Bridges resigned from the foundation's board.

In the years before complaints surfaced, Bridges told friends and associates that he came from a family worth billions. He said he owned a corporate jet, hobnobbed with world leaders, and served on the boards of prestigious groups, including New York's Guggenheim Museum.

But much of what Bridges said about himself didn't appear to be true, the Observer's 2009 investigation found.

In court papers, he denied that he misappropriated Long's money, but he later agreed to settle the lawsuit for an undisclosed sum.