Pennsylvania money manager indicted in Ohio BWC investment scandal

6/14/2007

Federal prosecutors today announced a four-count felony indictment against Mark D. Lay, the head of MDL Capital Management, which lost $216 million it managed for the Ohio Bureau of Workers Compensation in an off-shore hedge fund.

The indictment charges Mr. Lay, 43, of Aliquippa, Pa., with investment advisory fraud, mail fraud, and conspiracy to commit mail fraud and wire fraud. Prosecutors are seeking forfeiture of $1.79 million, the amount MDL was compensated by the bureau for managing the investment.

Mr. Lay is the 19th public official or money manager to be charged since The Blade first reported in April, 2005, about problems with another bureau venture a $50 million investment in rare-coins with former Toledo-area rare-coin dealer and political insider Tom Noe.

If convicted, Mr. Lay could face a maximum of 20 years in prison and hundreds of thousands of dollars in fines.

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