Petters Sentencing Delayed

Feb 16 2010 | 11:11am ET

Thomas Petters, the Minnesota businessman and hedge fund manager convicted last year of running a $3.65 billion scam, will be sentenced on March 15.

Petters was originally scheduled to be sentenced on March 10. He faces up to life in prison.

Despite his protestations of innocence, Petters was convicted of 20 counts of fraud and money laundering in December.

Petter’s fraud, which came to light just months before the much larger Ponzi scheme orchestrated by Bernard Madoff collapsed, involved selling bogus notes linked to consumer electronics sales which prosecutors say never actually happened. Investors in Petters Co. were told they were buying bulk electronics which were being resold to big-box retailers.

At least 20 hedge funds were the chief victims of the scheme, according to the complaint, and at least one allegedly helped Petters cover up his scam. In October, Lancelot Investment Management founder Gregory Bell pleaded guilty to mail fraud, admitting he co-engineered a series of bogus “roundtrip” transactions with Petters designed to hide losses and keep the Ponzi scheme afloat.

Petters, whose business empire once also included Polaroid Corp. and Sun Country Airlines, claimed the fraud was orchestrated by his underlings without his knowledge.

U.S. District Judge Richard Kyle, who oversaw Petters’ trial and will sentence him next month, has also been tasked with sentencing the six people who pleaded guilty in the case, including Bell. Those sentencings, which were originally assigned to another St. Paul, Minn., federal judge, are to take place after Petters’ sentencing.


In Depth

Steinbrugge: Top 10 Hedge Fund Industry Trends for 2017

Jan 3 2017 | 9:03pm ET

Each year, Agecroft Partners' Don Steinbrugge predicts the top hedge fund industry...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

Securities and Exchange Commission Chair Mary Jo White will step down as chair of the nation’s Wall Street overseer in January, setting the stage for a potential conservative shift in the regulator’s leadership under the incoming Donald Trump administration.