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April 8, 2010

Ponzi schemer Petters gets "only" 50 years for $3.5 billion fraud

As detailed in this Bloomberg report, another notable Ponzi schemer got another notable federal sentence this afternoon:

Petters Group Worldwide LLC founder Thomas Petters, convicted of orchestrating a $3.5 billion fraud scheme, was sentenced to 50 years in prison.

Petters, 52, was found guilty in December of 20 counts in what prosecutors said was the biggest fraud in Minnesota’s history. Prosecutors said he used his Petters Company Inc. to lure investor funds for fake deals to buy shipments of consumer goods and then used the money to support his lavish lifestyle.

“This was a massive fraud. There are victims who have been devastated here,” U.S. District Judge Richard Kyle in St. Paul said today at Petters’s sentencing hearing. “There’s nothing wrong with having three houses and airplanes and all of that, so long as it’s your money.”

Petters ran a Minnetonka, Minnesota-based business empire that bought companies including Sun Country Airlines Inc. and Polaroid Corp. until federal agents raided his home and offices on Sept. 24, 2008. Petters was found guilty by a federal jury in St. Paul of all charges filed against him, including money laundering and conspiracy....

With time off for time already served and for good behavior, Petters may be released after 41 years, Kyle said. At Petters’s request, Kyle said he will recommend that he serve his sentence in Minnesota.

Petters, who testified in his own defense, claimed that the fraud at PCI was committed by former Vice President Deanna Coleman and former Chief Financial Officer Robert White without his knowledge. Coleman and White, who pleaded guilty in the case, testified at Petters’s trial that they helped carry out the fraud under his direction. Four other prosecution witnesses in the case also pleaded guilty.

At the sentencing today, Kyle, who presided over the trial, said that Petters’s testimony “didn’t pass the smell test.” “The testimony was unbelievable -- let’s leave it at that,” Kyle said.

Given that the defendant here went to trial and aparently perjured himself in an effort to avoid doing time for his mass Ponzi crimes, her probably should consider himself luncky that he has an outside chance to live long enough to eventually get out of prison.

April 8, 2010 at 03:51 PM | Permalink

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Comments

Criminals causing more than $6 million in damages have assassinated an economic person. They must all be executed.

Posted by: Supremacy Claus | Apr 8, 2010 9:11:49 PM

got to love it. ONLY 41 years. at his age that is a LIFE SENTENCE...announce it as such!

Posted by: rodsmith | Apr 9, 2010 2:40:37 AM

It's difficult for me to feel much sympathy when the sentencing for drugs is so wildly draconian. At least that market involves knowing, informed participants. That being said, it is effectively a life sentence. Jokes about having an outside chance of being free within his lifetime aside, in effect he has received the same sentence a murderer would have received. As bad as the conduct is, is it that bad?

Posted by: Alec | Apr 10, 2010 11:40:37 AM

Alec --

"At least that market [drugs] involves knowing, informed participants."

Some of them are knowing, sure. Others, particularly high school kids, range from half-knowing to unknowing. And still others, fully adult and informed but addicted, are knowing but unable to control themselves absent actual custody.

As for this Petters case: I cannot even imagine how much $3.5 billion is. Can you? Do you think maybe a guy who cheats to this astronomical extent assumes the risk of however many years he gets?

Posted by: Bill Otis | Apr 10, 2010 11:58:21 PM

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