Saturday, 1 October 2016
Last updated 18 hours ago
Apr 8 2010 | 11:30am ET
Ponzi schemer Thomas Petters was sentenced to 50 years in prison this morning for defrauding investors of $3.65 billion.
U.S. District Judge Richard Kyle imposed the sentenced in St. Paul, Minn., federal court, four months after the 52-year-old was convicted of 20 counts of fraud, conspiracy and money laundering.
Prosecutors had sought 335 years for Petters, noting that “there are only a handful of fraud schemes that are even comparable in the history of the United States.” Petters’ own lawyers suggested four-to-12 years would be more appropriate.
Petters has vowed to appeal his conviction, claiming the fraud was orchestrated by his underlings without his knowledge.
Petter’s fraud, which came to light just months before the much larger Bernard Madoff scam 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.