SACRAMENTO--A federal jury has convicted a California man of selling nearly $8 million in bogus promissory notes that he falsely claimed were guaranteed by Lloyd's of London reinsurance.

R. David Bowman, principal of the defunct Santa Cruz, Calif.-based Kentfield Group, has been convicted of 15 counts of mail fraud stemming from his sale of the notes and the diversion of more than $1.6 million of the proceeds for his own use.

Prosecutors charged that Mr. Bowman sold the notes to 115 investors in three states in 1997 and 1998, claiming that they would pay up to 12% annual interest and that they were backed by "performance guarantee bonds" reinsured at Lloyd's.

The bonds were actually issued by Berkston Insurance Co. A.V.V., an Aruba-based insurer formerly operated from Lauderhill, Fla., by Richard F. Vucenic. Mr. Bowman continued to tell investors that Berkston was 100% reinsured by Lloyd's even after Lloyd's officials told him the market had no involvement with Berkston, prosecutors alleged. Mr. Vucenic pleaded guilty in 1999 to one count of mail fraud related to the Kentfield scheme and was sentenced to 25 months in prison and ordered to pay $690,557 in restitution.

Kentfield, in fact, was a Ponzi scheme, in which new investors' money was used to pay some earlier investors while large sums were diverted to Mr. Bowman and others, prosecutors charged. Mr. Bowman, for example, transferred $600,000 to himself and his wife; used another $600,000 to buy and remodel a Santa Cruz house; spent $150,000 on new cars, including an Infiniti and a Saab Turbo; and used $100,000 to cover other personal expenses, including ski vacations and shopping sprees, prosecutors charged.

Another $3.6 million of the proceeds went to companies to which he or other Kentfield partners had economic ties, and Mr. Bowman received "hefty commissions" or access to bank accounts in return for the alleged investments, according to the charges.

The mail fraud charges carry a maximum prison term of five years each, though Mr. Bowman's actual sentence will be determined by federal sentencing guidelines. He is scheduled for sentencing April 19 and is being held without bond as a flight risk and an economic danger to the community, according to the U.S. Attorney for the Eastern District of California in Sacramento.