By James McNair
The Cincinnati Enquirer

Ben Schmidt's sunny retirement in St. Petersburg, Fla., will be blotted out by the shadow of a federal probation officer for five years.

Schmidt, a partner in the Ben-Mar Investments scam that took $12.2 million from Greater Cincinnati residents in the early 1990s, was sentenced to five years of supervised probation Thursday for concealing assets in a federal bankruptcy case.

U.S. District Judge Sandra Beckwith also ordered him to pay $15,000 to the bankruptcy trustee, Cincinnati lawyer Richard Nelson.

Schmidt, 69, was never charged with a crime after Ben-Mar collapsed in 1995. The Securities and Exchange Commission, however, won a $2.9 million civil judgment against him. And after he removed fixtures and items from the $680,000 Crestview Hills house he surrendered in bankruptcy, a federal grand jury indicted him in August for obstruction of justice.

Schmidt's lawyer, Patrick Hanley of Covington, said in court Thursday that it was Schmidt's partner, Mark Gatch, who was primarily responsible for the Ponzi scheme that defrauded 365 people, mostly Northern Kentuckians. Gatch was convicted for his role and spent 21/2 years in prison.

Among Ben-Mar's victims was Bill Erpenbeck, the Northern Kentucky homebuilder who faces 30 years in prison for defrauding banks and homebuyers by diverting $33 million in home-purchase funds. But that caused no great discord between Schmidt and the Erpenbeck family. After Ben-Mar, Schmidt and Bill Erpenbeck's father, Tony Erpenbeck, entered into a gem-mining venture for tourists in Gatlinburg, Tenn.

E-mail jmcnair@enquirer.com