Authorities track down Peninger

Captured fugitive Michael Derrick Peninger was brought to the Charleston County Detention Center on Wednesday. Peninger had been on the run for 10 days after failing to appear for his sentencing.

Wade Spees

After more than a week on the run, convicted schemer Michael Derrick Peninger was hauled before a federal magistrate Wednesday and sent directly to jail.

Peninger, 50, was captured Wednesday morning on Daniel Island by deputy U.S. Marshals, assisted by Charleston police officers and FBI agents. Dogs tracked Peninger into some woods and followed his trail into the business district where he was seen walking in the 300 block of Seven Farms Drive. He was then taken into custody.

"We appreciate the support from our fellow law enforcement community in apprehending Peninger," U.S. Marshal Kelvin Washington said. "He will now face the courts for his original sentence to be imposed."

His capture stemmed from a confidential tip and involved more than a dozen law enforcement agents, according to a person close to the investigation.

A jury in October convicted Peninger of eight counts of mail fraud and one count of lying to an FBI agent in what investigators call a Ponzi scheme that consumed $7 million in investors' money. Authorities estimate as many as 35 people fell victim to Peninger's scheme, and the FBI launched an investigation in 2007.

Peninger, who had been free on bail and facing up to 20 years in prison, had failed to show up for his sentencing in U.S. District Court on April 12. Judge Michael Duffy immediately ordered that the Marshals Service track down and arrest the former commodities trader.

Peninger had been living at his mother's Daniel Island home since two weeks after his October conviction. Duffy allowed him, after just days in the Charleston County Detention Center, to return to his mother's house in order to sort through his finances and health care and to attend to his mother and ailing stepfather.

Duffy said earlier this month that Peninger, when caught, would face a hearing to determine whether he was in contempt of court. That could increase his prison sentence, according to the judge. Duffy also said a defendant has not appeared for sentencing only once or twice in his 15 years on the bench.

Duffy was out of town on Wednesday and unable to preside over the bail revocation hearing.

Wearing a blue denim shirt and handcuffs, Peninger remained silent during a hearing before U.S. Magistrate Robert Carr at the federal courthouse on Broad Street.

Assistant U.S. Attorney Rhett DeHart said Peninger left his residence on Daniel Island about 9:30 a.m. April 12 and failed to appear at his sentencing, which had been scheduled for 2 p.m. He also failed to contact his federal probation officer.

"He was wearing an electronic monitor. He cut off his transmitter and fled," DeHart said. "He's been a fugitive for 10 days. He tells us he does not know where the transmitter is. He faces 17 1/2 to 20 years in prison and we believe he's a flight risk."

Peninger's car was found within days after he fled near the Georgia-South Carolina border, DeHart said. DeHart said he did not know how Peninger made his way back to Daniel Island.

Peninger's attorney, Kerry Koon, said he would not contest the prosecution's request that Peninger be jailed.

"He's unlikely to abide by the conditions of his release," Carr said as he ordered that Peninger be placed in federal detention. Deputy U.S. Marshals transported Peninger to the county jail.

After the hearing, DeHart said he had originally recommended that Peninger be sentenced to 17 1/2 years in prison, but he now plans on asking for the statutory maximum penalty of 20 years.