In the latest installment of chaos and potential ruin visited upon those touched by convicted swindler Tom Petters, Cathedral High School says it doesn't have the money to repay $250,000 he donated to the school to build an elevator.
The money is part of about $12 million being tracked down by a court-appointed receiver. The school had no idea that the donation, and two other smaller ones, were the profits of ill-gotten gains.
After Tom Petters was found guilty on 20 counts of fraud and money laundering last week, the College of St. Benedict apparently felt it prudent to distance itself from the $3.5 billion Ponzi-schemer's surname.
The auditorium was named after Petters' parents, Fred and Rosemary,
after he handed the college a $3 million pledge. According to the Strib, "[St. Benedict] made its decision in consultation with the Fred and Rosemary Petters
family, who it says are 'cherished friends' of the college."
After 30-plus hours of waiting for the jury in the Petters fraud trial to bring in a verdict, after waiting in the Jury Assembly room on the ground floor of the Federal Courthouse in Saint Paul, after sketching the live feed from the empty courtroom on the seventh floor on the flat-screeen monitor, after sketching details of the Jury Assembly Room like the microphone, and the reporters waiting for the verdict in the Jury Assembly Room, after sketching the railroad lift bridge over the Mississippi, after hearing defense attorney Jon Hopeman say the deliberations could go three hours or thirty days, after sketching the televsion news truck and the truck's boom antenna from the seventh floor and the seventh floor and the photos of judges on the seventh floor and the bored, dozing witness from another trial on the seventh floor... just when I was starting to get really bored, we got the word at four o'clock that the jury had reached a decision.
Tom Petters has been found guilty of all 20 counts. Convicted of bilking more than $3.5 billion out of investors taken in by his slick persona, Petters now awaits sentencing.
On the surface, the owner of Sun Country Airlines and Polaroid Corps. was a wildly successful businessman whose pious Christian streak ingratiated him to myriad movers and shakers throughout the state. But that facade came crumbling down in October of last year after he was arrested for orchestrating what was then the largest ponzi scheme in American history (Bernie Madoff stole the show just weeks later).
I arrived early to the courthouse today, but there was already a crowd of spectators lining up to watch the Government and the Tom Petters's attorneys give their final arguments.
Petters said he was too grief-stricken to be fully in charge of the business, but he also boasted about his deal-making with big merchandisers and his business trips all over the world.
The Government continued to build its case against Tom Petters with more testimony from businessmen. Michael Liss, an investor described Petter's stalling tactics when Petters couldn't repay a loan. Liss said Petters made all kinds of excuses while he continued to live like a "big-time wheeler-dealer"... like a "swashbuckling industrialist" with his "Blackberry abuzz".
The prosecution continued the questioning of restauranteur Dean Vlahos about his friendship and business dealings with Tom Petters.,Vlahos was best friends with Tom Petters. They gave watches to each other and they weren't Timex watches.
Vlahos put up his homes as collateral for the lone Petters said he was using to buy merchandise from Circuit City. The loan went bad and Vlahos had to sell his homes to pay off his debt.
PCI associate Bob White took the stand and testified how he forged thousands of documents at the request of Tom Petters. In a taped conversation played earlier in the trial, Petters compared White to Quasimodo ringing the bells (of fraud) in PCI's belfry.
Bob White testified about the day the FBI raided PCI and came to his office. He agreed to cop a plea on the spot and cooperate with the investigation.
More recorded conversations were played in court today. We listened to a brainstorming session on the eve of the collapse of PCI. Petters gave a bizarre one-man, stream of consciousness rant that went on way too long. The witness held his head in his hands and yawned. If Judge Kyle had not called a break, my head would have exploded.
After the break, we heard another taped conversation in which a Petters talks with Bob White on the phone about fleeing the country on Bob White's boat.
Bob White explained that it wasn't easy to just take off... they would have to fuel the boat and load up with food and other stuff.
Tom Petters told White to Google "Marc Rich", the fugitive financier who was pardoned by President Bill Clinton. Bob White is sixty-eight years old and facing thirty years in jail.
Tomorrow will be a short day with more testimony from the Bob White.
November 3rd, the fifth day of the trial of Tom Petters.
Deanna Coleman took the stand again today. Assistant U.S Attorney Joe Dixon asked Coleman about about the weird financial dealings at PCI including the huge bonuses Petters paid his "Dream Team" of executives. Coleman wrote and Petters signed bonuses worth millions of dollars as Petters' companies lost money. Deanna Coleman admitted her bonuses were rewards for "doing what Tom said" which was helping Petters with the fraudulent deals. Coleman's bonuses were used to buy an expensive home and condos in Costa Rica. Tom Petters wrote himself a $90,000 Christmas bonus check to pay for a Bentley.
The tears started to gush when Dixon read a 2006 email to her from Tom Petters with this excerpt: "The reason I sent you flowers this week is I spent a fair amount of time crying about all I've done in my life."
Dixon asked Coleman if their relationship was intimate and Coleman said it was, but it ended in 2006.
We then heard Tom Petters crying on a recording Coleman made after she agreed to wear a wire. Petters was fearful that that he would be unable to pay back investors Bob Sabes and Jon Sabes he claimed were mobbed up. He claimed former Minnesota Attorney General Mike Hatch gave him a three-ring binder about the Sabes family connections to the mob.
"They would spend $50,000 to to have someone come out and kill you." Petters' despair reaches a climax as he cried, "We can't live in a world of shit anymore.... I just can't stand the fuckin' lies!"
During the Tom Petters trial today, prosecutors played a tape recorded during the final days before his businesses collapsed where Petters says he fears that some of his investors might be connected to the mob and would kill him if he didn't pay them off.
The recording, from Sept. 22, 2008, was created by Petters whistleblower Deanna Coleman and played during her testimony.
"We're at a breaking point," Petters said on the tape. "I can't stand where we are. ... None of us are OK. ... We've got problems. I'm trying as hard as I can to find a way out of this. I don't think we can all think clearly anymore."
He said he was afraid that Robert Sabes and his son Jon, who authorities say had invested $17 million to $19 million with Petters at the time of Petters' collapse, might kill him.
"Jon Sabes needs to calm down a bit," Petters said, adding that he believed he was connected to organized crime. "They are bad, bad people. I think he'd kill me."
Read the rest of the Star Tribune report here. And check back later tonight for a recap from Ken Avidor with courtroom sketches.
It's Monday, November 2nd and Day 4 of the trial of Tom Petters. The trial began at 9 a.m. with Assistant U.S. Attorney Joe Dixon asking forensic expert Dyan Decker about how she identifies and tracks email.
A half hour later, the Government's star witness Deanna Coleman took the stand and Joe Dixon asked Coleman about the day she went to the Feds and blew the whistle on Tom Petters' $3.5 billion Ponzi scheme.
The Elbow Lake native did not look at her former employer as she identified emails, phony purchase orders and other documents. This part of the testimony was kind of dull, but essential to the Government's case.
Deanna Coleman explained how she agreed to wear a wire and excerpts of conversations between her and Tom Petters were played.
In one excerpt, a stressed-out Tom Petters was freaking out because the Hedge Funds wanted their money and he was scrambling to pay them.
Petters began to cry and asked Deanna Coleman for a hug. Deanna Coleman freaked out because she was wearing a wire on her back ... so she complained about a pain in her back and refused to hug Petters.
Tom Petters then offered to fix her up with a chiropractor.
Tomorrow; More testimony from Deanna Coleman. -- Ken Avidor
Ken Avidor will be covering the Trial of Tom Petters for City Pages, offering his unique, artistic take on a sensational trial that has barred cameras.
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