Ex-Petters Employees Asked to Pay Back Bonuses
Former employees of Petters Group Worldwide are being asked to return their year-end bonuses from previous years in order to help repay investors who lost money in Tom Petters' $3.65 billion Ponzi scheme, according to various media reports.
Doug Kelley, the court-appointed receiver handling the bankruptcy case resulting from the scam, did not return messages requesting additional information, but the Pioneer Press reported that he sent out about 70 letters to former employees who are being asked to make repayments.
The amounts being sought reportedly range from about $5,000 to more than $2 million.
Some of the largest bonus checks went to Petters executives who pleaded guilty to their involvement in the fraud scheme, according to the Pioneer Press article. But some other employees worked for legitimate businesses that were part of Petters Group Worldwide, and their bonuses came from Petters Company, Inc., through which the fraud scheme took place.
The letters requesting repayment cover some of the large, $1 million-plus bonuses but not all of them.
It's unclear which former Petters employees got the letters and the total amount of money being requested back from them.
Kelley is in the process of negotiating with those who got more from their investments than they put in. Those clawback actions involve about $500 million in total, and they could turn into court cases later this fall.
Former Wayzata businessman Tom Petters was found guilty in December of 20 felony counts relating to fraud, conspiracy, and money laundering, for orchestrating a $3.65 billion Ponzi scheme that spanned a decade.
Petters, who maintains his innocence, was sentenced to 50 years in prison in April. His attorney filed a formal notice of appeal later that month.
Four of seven co-conspirators who pleaded guilty to charges related to the fraud scheme-Deanna Coleman, Michael Catain, Larry Reynolds, and Robert White-were sentenced earlier this month. The other three are scheduled to be sentenced within the next few weeks.