Founder of Petters Group Worldwide Due in Federal Court

October 8, 2008

Attorneys for Tom Petters are arguing for his release, noting that although the founder of Petters Group Worldwide faces charges of fraud, he is not a danger to the public and is not a flight risk.

Petters, 51, was arrested on federal charges of mail fraud, wire fraud, money laundering and obstruction of justice in what authorities say was a scheme to defraud investors of more than $100 million.

Court documents indicate as much as $3 billion might be tied to the fraud.

Petters is being held without bail in the Sherburne County Jail. A hearing on his detention was scheduled for 2 p.m. Tuesday in U.S. District Court in St. Paul.

In a court filing Monday, his attorneys asked that he be released, suggesting that home detention and electronic monitoring might be a more suitable option.

But in other filings, the U.S. Attorneys Office asked that Petters remain in custody until his trial, saying that in secret recordings, Petters discussed fleeing the country.

In court documents, Assistant U.S. Attorney John Marti wrote that Petters also contacted witnesses since he became aware of the investigation and that he has encouraged at least one potential witness to leave the United States before the trial.

“Furthermore, the defendant encouraged the subject to obtain false identification through internet web sites, and intimated that he (Petters) has false identification,” Marti wrote.

Petters’ attorneys said he is not a flight risk, noting he has family in Minnesota, including two young sons — ages 3 and 1 — a significant other, his parents, brothers and sisters. Attorney Eric J. Riensche also wrote in court documents that Petters has a 22-year-old daughter in Florida.

“Mr. Petters is not accused of a crime of violence,” Riensche wrote. “Further, although the Government contends that Mr. Petters has contacted witnesses, the Government does not appear to claim that Mr. Petters attempted to intimidate witnesses or influence testimony.”

Riensche said Petters’ assets were estimated at over $1 billion as of last December, and that a federal judge “restrained” those assets on Monday. In addition, Petters surrendered his passport to authorities.

Riensche also wrote that Petters has known about the government’s investigation since Sept. 24 and has cooperated. Petters also resigned from his jobs as chairman and CEO of Petters Group.

Petters Group Worldwide had $2.3 billion in revenue in 2007. The company has investments in dozens of companies. Its holdings include Polaroid and Sun Country Airlines, which filed for Chapter 11 bankruptcy on Monday after it couldn’t turn to its parent company for a short-term loan because of the federal investigation.

Was this article valuable?

Here are more articles you may enjoy.