Supreme Court Rejects Appeal from Petters’ Victims
The U.S. Supreme Court has reportedly upheld a federal judge's order and rejected an appeal from victims of Tom Petters' $3.65 billion Ponzi scheme.
Investment funds that together lost $165 million in the massive fraud scheme sought repayment of their losses. They challenged a federal judge's order that denied restitution to any victims-but Supreme Court justices favored the previous ruling, according to the Associated Press.
The court reportedly said that the victims would have other ways of recouping the money they lost.
According to the Associated Press, a federal law usually requires a court to order restitution as part of a defendant's sentence, but it does allow for some exceptions. In this case, the judge said that restitution would be too complicated, take too much time, and result in very small payments-less than a penny for each dollar that victims lost.
Richie Capital Management, LLC-an Illinois-based investment firm that lost big as a result of Petters' scam-fought hard for restitution and filed the Supreme Court appeal. Thane Ritchie, founder of Ritchie Capital Management, said in a December statement that many people involved in the Petters case “have either manipulated the law or turned a blind eye to manipulation by others, and as a result have thwarted the efforts of innocent victims to recover their legitimate property.”
Ritchie said late last year that the Mandatory Victim Restitution Act of 1996 dictates that it should be awarded restitution for its losses by suing Petters' companies directly, but the U.S. District Court in Minnesota and the Eighth Circuit Court of Appeals ruled that victims must recover funds through other means-namely, by filing claims in the Petters bankruptcy case and receiving assets when they are doled out by Doug Kelley, the receiver in the case.
Petters, a former Wayzata businessman, was found guilty in December of 20 felony counts relating to fraud, conspiracy, and money laundering, for orchestrating the Ponzi scheme, which spanned a decade. He was sentenced to 50 years in prison in April.