More than lost fortunes in the wake of Petters’ Ponzi scheme

Martin Lackner, a Minneapolis native, wasn’t around to hear about the 50-year sentence handed to Tom Petters today. He killed himself last year, not long before the head of the hedge fund where he worked was indicted on charges he helped Petters carry out his multi-billion dollar Ponzi scheme.

Lackner’s suicide — he hanged himself in his home — sparked online comments by conspiracy theorists that he killed himself because investigators were closing in. His friends insist he killed himself because he was depressed over unwittingly investing the money of people he knew in a fund he didn’t know was a scam. We’ll never know; he apparently didn’t leave a note.

But Jon Bassewitz of St. Paul, a longtime friend of Lackner’s, has no doubts. “He was a remarkable man,” Bassewitz told me today. “He lost his father when he was young, and later had an opportunity to work for his uncle on the Chicago Options Exchange. He did very well and retired at age 35. He moved back here and had a house near the Lake of the Isles.”

But Lackner got bored, Mr. Bassewitz said, and he and his family moved back to Chicago where he joined Lancelot Management, a hedge fund operated by Gregory Bell and his wife, Inna Goldman. Both were indicted for feeding up to $2 billion to Petters’ scheme.

Lackner was not mentioned in the indictment. Bassewitz says he was inncocent of any involvement. “He had a large number of friends and a large number of people who relied on his sage investment advice,” he said. “He sold these investments to many people. He was the kind of person who had no need to make money. He wasn’t greedy. He didn’t live a lavish lifestyle. He was utterly shocked and devastated when his business was closed down.”

Bassewitz says many people Lackner knew lost large sums of money. “He took on this horrible mode of self reproach,” he said. He was seeing a psychiatrist and getting medical care.”

Lackner’s wife went out for awhile last June 18, and Lackner hung himself. “It wasn’t his fault,” Bassewitz said. “I’m sorry he made this terrible mistake. Even if people called and said, ‘I forgive you,’ he wouldn’t forgive himself.”

The last time Bassewitz saw Lackner was at his brother’s son’s bar mitzvah. “My father was sick. He had Parkinson’s. It was difficult for him just making it around. Marty took it upon himself to be with my dad throughout this whole reception. He was a real mench,” he said.

“My friend had based his self-esteem on his integrity and sound judgment. He was such a good man! Sadly, he fell into a profound state of depression — nine months of utter hell — and sought release in death,” he said. “Forty-one years of imprisonment may be the best that human justice can dispense, yet Petters will live out his years in relatively comfortable circumstances. As far as I am concerned, this is very light punishment for destroying my friend’s life and no doubt that of many others.”