Minneapolis / St. Paul News Blog

​A federal judge announced Monday that he will sentence Tom Petters on March 10 for running a $3.65 billion Ponzi scheme, and experts predict the hammer will come down hard on the fallen business mogul.

Petters could easily spend the rest of his life in prison, says Donald M. Lewis, Dean of the Hamline University Law School.

Lewis says federal guidelines put Petters at a base recommendation of 17 and a half years in prison.

​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.

​The court-appointed receiver charged with tracking down the ill-gotten gains of convicted Ponzi-schemer Tom Petters has asked Cathedral High School in St. Cloud to return a $250,000 donation from the disgraced businessman.

Receiver Doug Kelley told the St. Cloud Times that Petters donated about $12 million to various schools and universities. The Cathedral board will meet Jan. 28 to take up the matter.

In December, the monks of St. John's Abbey voted to return a $2 million gift from the Thomas J. Petters Family Foundation for the construction of its Petters Pavilion, and to remove the Petters name from the building.

The College of St. Benedict renamed its Petters Auditorium to Escher Auditorium in December, to distance itself from Peters and to honor the late Sister Firmin Escher, a nun at the Monastery at St. Benedict who helped the school construct its Benedicta Arts Center.

​Another black mark on the Petters name, after Tom Petters was convicted of running a multi-billion dollar Ponzi scheme: The monks of St. John's Abbey have voted to return a $2 million gift from the Thomas J. Petters Family Foundation for the construction of the Petters Pavilion and to remove the name.

Since the pavilion is already built, how does one "return" it? According to Brother Aaron Raverty, the money -- rather than the building -- was donated to St. John's Abbey. Since it has already been spent in building the pavilion,"We will be paying back the money out of the abbey's own operating funds. Arrangements with the court-appointed receiver have not been finalized, he says, "But we expect to send the repayment in two cash payments. One will be sent in January 2010, and the second payment about six months later."

No contractual obligations are needed to negotiate the name change, Raverty said. The order's community leader, Abbot John Klassen, has met with Tom Petters' parents -- in whose name the pavilion was named -- and his parents understand and support the monks' actions.

The 3,500 square-foot structure was finished in May 2007.

It's opening was described this way in the Abbey's Fall 2007 newsletter:

Several hundred guests joined the monastic community for the blessing of the pavilion on May 6, 2007. After brief remarks by Abbot John Klassen, OSB,Thomas Petters and architect Vincent James, Rosemary Petters read from the prophet Ezekiel who describes the new temple built to replace Solomon's temple destroyed by the Babylonians.

Earlier this month, the College of St. Benedict renamed its Petters Auditorium to Escher Auditorium, to distance itself from the disgraced former benefactor and to honor the late Sister Firmin Escher, a nun at the Monastery at St. Benedict who helped the school construct its Benedicta Arts Center. The auditorium was named after Petters' parents, Fred and Rosemary, after he handed the college a $3 million pledge.

​Stop The Petters Scam Foundation, a group that maintains a Web site and runs an ad campaign seeking to draw attention to the financial misdeeds of convicted Ponzi schemer Tom Petters, has filed a lawsuit against the Star Tribune, accusing the paper of breach of contract and censorship after it yanked the group's ads midway through their scheduled run.

The Strib said in a news story on Dec. 4 that it was pulling the ads, which "accuse prominent Twin Cities professionals of mismanaging Petters' assets since he was arrested last year."

​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).

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​The National Institute of Family and the Media, a Minneapolis-based collection of busybodies obsessed with video game violence, has decided to shut its doors. The group's founder, psychologist David Walsh, said the decision was made in light of "the current challenging economic environment." 

Founded in 1996, the institute took an adversarial approach to the video game industry, pushing for more stringent regulations on the sale of video games to minors from the get-go. The group handed out annual "report cards," invariably piss-poor, assessing Entertainment Software Rating Board's governing of the industry.

 

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Photo by dmuth

​ WCCO's Esme Murphy is covering the Tom Petters trial, which is currently in the jury selection phase. She has an interesting post about one the ladies who managed to get dismissed from selection. How did she pull it off? She apparently refuses to drive in "the cities."

Yes, she's a lady from New Prague and her refusal to drive in "the cities" got her out of jury duty. Why don't people pull this excuse more often? She said she was willing to drive to Burnsville, but wanted the court to provide her transportation from there.

As of 11 a.m., the judge had interviewed 29 potential jurors, according to the Star Tribune. Two people, including the New Prague woman, were dismissed. The second was a man who said he knew too much about the case already.

Since when do people get out of their civic duty as adults by claiming they refuse to drive in a metropolitan area? We're dumbfounded that this actually worked for her. We'd prefer hearing that the court told her to suck it up and learn how most adults deal with it. Should us city dwellers have to take more jury duty just because we manage to navigate a (sort of) busy city by car?

Maybe there is more to her excuse, but WCCO has us on a roll. Stand up against fearful rural Minnesotans!

​ Federal prosecutors are starting to outline their case against former Minnesota businessman Tom Petters and his alleged Ponzi scheme that bilked investors of up to $3.5 billion. And one piece of evidence actually makes Petters appear "sorry" for what he did. Still skeptical.

Petters sent flowers two years ago to Deanna Coleman, one of his associates that blew the whistle on his business practices last year. He expressed his feelings about where the company was going and promised to shape up.

From Minnesota Public Radio:

"I ask daily to be able to get up and have God to help me change this company into one we are so proud of instead of full of shame!" Petters wrote in the e-mail to Deanna Coleman dated April 1, 2006.

According to prosecutors, the e-mail to Coleman demonstrated how Petters repeatedly told his associates that he would figure out a way for them to escape the fraud at Petters Co. Inc. (PCI), and Coleman revealed the alleged scheme to the U.S. Attorney's office in September 2008, prosecutors said in the new court filing.

Petters is scheduled to go on trial Oct. 26, but his attorneys are still trying to get the case moved out of the state due to the amount of media coverage that could hurt his chance for a fair trial.

​ Tom Petters: was our local pariah duped himself?

Larry Reynolds -- whose real name is Larry Reservitz -- is a swindler and drug trafficker with connections to the New England mob. Petters's attorneys are arguing he is to blame for the entire financial scandal.

Using court documents and newspaper clippings, The Star Tribune has pieced together a fascinating portrait of a man who helped Petters bilk investors out of billions.

Reynolds said he got about $6 million in fees from Petters for laundering $12 billion in funds between 2002 and 2008. He pleaded guilty in St. Paul to conspiracy to commit money laundering and faces up to 20 years in prison.

Petters's trial is scheduled to begin in October. Petters's attorneys are pushing for the case against him to be dropped, suggesting that Petters himself might have been duped by Reynolds.

For more fascinating details on Minnesota's mini-Madoff, the Strib story is well worth a read.

Anyone on the market for a $7.8 million home? We didn't think so. But if you are, you can possibly bask in the Ponzi glory of local businessman Tom Petters.

He's enjoying his luxurious jail cell right now as he awaits trial in a more than $3 billion Ponzi scheme against investors.

He was arrested in October and has a September trial date. You won't believe the details on the home this man was living in.

During pre-trial hearings Wednesday, Minnesota businessman Tom Petters appeared in court. His attorneys say he is being treated unfairly in jail and not given the same freedom as others in the clinker.

Give this guy a break! It's not like he is accused of a $3.5 billion Ponzi scheme that destroyed the lives of many. Innocent until proven guilty though.

Hearings on pretrial motions in St. Paul's federal court started today with some interesting testimony against Minnesota businessman Tom Petters. He is accused of bilking investors of more than $3.5 billion in a Ponzi scheme. We are beginning to get a better image of what happened as FBI agents raided his business.

One Nevada Gaming Control Board agent testified that when Petters was approached in Las Vegas in September, he said "I am the guy in charge and I will bite the bullet if I have to," according to a Star Tribune report.

Lawyers for Minnesota businessman Tom Petters are pretty pissed. Would you want to defend this guy for table scraps? Doubtful.

Well, they are requesting the big bucks for their work and the U.S. Attorney's office has asked the court to limit or cap attorney's fees to save the money for those who have allegedly lost out in the Petters Ponzi scheme. The lawyers are currently protesting the decision, claiming they are owed $500,000 for their work so far and that a proper defense for this man will cost $5 million.

That's like burning money in a giant bonfire.

Tom Petters's legal team was whining that the media had been too mean to them. Therefore Petters can't get a fair trial and they should go somewhere wild like Des Moines or Milwaukee instead. Unfortunately they forgot that Petters is a well-known businessman in Minnesota accused of a $3.5 billion Ponzi scheme. Kind of a big deal, so the media should be commended for staying on the story.

And the judge laid down the law today: The case is staying here, at least for now. And don't whine when you feed the fire.

Haters of Tom Petters will have to be a little more creative if they are going to create a Web site based on their disgust for him.

The Wall Street Journal has an interesting piece about some of the domain names Petters bought up to squash haters from talking smack as he sits in jail accused of a $3.5 billion Ponzi scheme.

Petters owns ihatepetters.com along with some other interesting sites.

You can't silence them, Petters!

Tom Petters's associate Michael Catain lucked out yesterday. A federal judge released him from custody because he wasn't a flight risk. Catain pleaded guilty in October for his role in the alleged $3.5 billion Ponzi scheme.

We're sure his neighbors are just thrilled.

Petters is still in jail awaiting trial.

The alleged multi-billion dollar Ponzi scheme of Tom Petters is easily one of the biggest fraud cases in Minnesota history, but Petters seems to believe that the state's largest newspaper shouldn't be paying it much attention. That makes sense.

Citing multiple instances of ...GASP... a newspaper reporting the facts, Petters's lawyers are requesting to move his trial. The Star Tribune's coverage has ruined the jury pool, they say.

A U.S. bankruptcy judge approved the sale of Polaroid Group, one of the remaining valuable assets left with Petters Group Worldwide. Starting bid: $42 million. It's quite a steal!

Put in your bid by March 26 for the auction on March 30.

Tom Petters, who is currently in jail awaiting trial for allegedly running a multi-billion Ponzi scheme, paid $426 million for Polaroid in 2005.

Michael Catain's Shorewood neighbors have more to celebrate this week. The "neighborhood bully" was busted trying to hide some of his assets and household goodies from the courts so he could still live the high life. Catain was sent right back to the clinker.

His buddy Tom Petters was busted doing the same thing. It's hard trying to live the life of a "normal" person, isn't it?

Former CEO Tom Petters, who is accused of running a more than $3 billion Ponzi scheme against investors, is now accused of hiding and diverting assets worth $50,000 after a court-ordered freeze of his property. Two of his associates are accused for doing the same.