Appeals Court Upholds Petters’ Conviction, Sentence
A federal appeals court on Friday upheld the conviction and 50-year prison sentence of Minnesota businessman Tom Petters-who was found guilty of orchestrating a $3.65 billion fraud scheme.
Petters received a fair trial, ruled a three-judge Eighth U.S. Circuit Court of Appeals panel-which determined that Petters wasn't denied access to a full defense of his case, that jury instructions were appropriate, and that his sentence was within the discretion of U.S. District Court Judge Richard Kyle, according to the Associated Press (AP).
Petters was convicted in December 2009 on 20 counts of fraud, conspiracy, and money laundering after a month-long trial and five days of jury deliberations. His appeal was filed and argued in 2010-the same year that his sentence was handed down.
Through Petters' appeal, his defense argued that Kyle prevented his attorneys from presenting a complete defense by cutting short the cross-examination of Larry Reynolds. Reynolds is a convicted felon and disbarred lawyer who was in the witness protection program, and Petters' attorneys claimed that they weren't able to fully question him about his links to organized crime, according to the AP.
In its 16-page opinion, the appeals panel also said that there were insufficient grounds for a change of venue, which Petters' defense team had requested in light of the pre-trial publicity surrounding the case.
“We agree with the district court that . . . Petters was not entitled to a presumption of prejudice and the district court did not abuse its discretion in denying the motion to change venue,” the Star Tribune quoted the panel as having written.
According to the Minneapolis newspaper, Petters attorney Jon Hopeman said that the ruling will be appealed to the U.S. Supreme Court.
“I know Mr. Petters well, and I can tell you he will never quit trying to vindicate himself and secure his release,” Hopeman reportedly said.
Petters is currently serving his sentence at the Leavenworth federal prison in Kansas.
Meanwhile, Deanna Coleman-a Petters co-conspirator and the fraud scheme whistleblower-testified Monday in St. Paul in a Petters-related bankruptcy proceeding. According to the Star Tribune, she detailed 14 years of living a lie and acknowledged that she and Petters referred to their operation as a Ponzi scheme long before federal prosecutors did.
She reportedly estimated at the proceeding that “99 percent” of the electronic consumer goods purportedly sold through Petters Companies, Inc., “were fake.”
The Star Tribune reported that Coleman testified that she first met Petters during a job interview in 1993 when he ran a small marketing company. Within a year, she learned about his practice of creating false purchase orders and invoices from big-box retailers. She said that Petters told her that it was something to replace a purchase order until one came in, and she believed him at first. But eventually, “Tom would raise some money, I'd create a purchase order for $1.2 million to $1.5 million, and the investor would give us $1 million,” she reportedly recalled.
Coleman now lives in north-central Minnesota after serving nearly a year in federal prison for her role in the Ponzi scheme. Her testimony is being used in conjunction with an effort by bankruptcy trustee Doug Kelley to recover, or “claw back,” nearly $1 billion in “phantom profits” and assets.