The head of a company once responsible for managing Bermuda Government pension funds totalling millions of dollars has been convicted of fraud charges.

An American jury found Mark Lay, chief executive officer and founder of MDL Capital Management of Pittsburgh, lost $216 million in state investment funds as part of a wide-reaching scandal involving the Ohio Bureau of Workers' Compensation.

MDL was hired in 2001 to manage $51.5 million of the Bermuda Government's Contributory Pension Fund and $18.3 million of the island's Public Service Superannuation Fund on the recommendation of Tina Byles Williams (formerly Poitevien), allegedly a friend of Premier Ewart Brown and his wife Wanda, and a former pension consultant for this island.

Government fired MDL four years later for poor performance ¿ having paid the company $557,924.48 for its services over that period. Only a short while later, the company was embroiled in the Bureau of Workers' Compensation scandal. The case emerged from the 2005 discovery that Republican donor Tom Noe was investing state money in rare coins. Noe is serving 18 years in prison.

Prosecutors had argued that Lay hid the extent of the risk he took and went way beyond the investment limit state officials had set. As a result, Ms Williams' company, Fiduciary Investment Solutions Inc., which had been hired to evaluate the performance of MDL, lost its $48,000 contract.

In 2003 this newspaper reported that Ms Williams (pictured) organised a 'pay-to-play' luncheon in Washington, DC for Dr. Brown which some representatives from the pension investment industry paid $2,500 to attend.

The articles claimed that the 2002 lunch for the then deputy Premier was an example of a practice referred to in America as 'pay-to-play', where donors hope their contributions will be rewarded with lucrative government contracts.

Earlier this year Ms Williams launched a libel action against three former employees whom she alleges conspired to destroy her company's reputation by feeding false information to the Mid-Ocean News and the firm's clients.

Through her lawyer George Bochetto, Ms Williams has admitted the luncheon took place but denied FIS had any expectation of financial reward, pointing out that the luncheon was not held in honour of the Finance Minister ¿ whose department would be responsible for awarding pensions contracts ¿ and that it occurred two years after her company was hired as a Government consultant. Lay faces a maximum sentence of 20 years, having been found guilty of investment advisory fraud, two counts of mail fraud and conspiracy to commit mail and wire fraud.

As reported by the Associated Press, Lay appeared stunned by the guilty verdict. His lawyer Richard Kerger speculated that the amount of money lost may have been a factor in the jury's decision.