Trustee Seeks To Expand The Scope Of Petters Clawbacks

The bankruptcy trustee attempting to round up “false profits” tied to the Tom Petters Ponzi scheme wants permission to pursue “clawback” claims in 26 countries around the world.

Roughly four years after former Minnesota businessman Tom Petters was sentenced to 50 years in prison for his role in a Ponzi scheme, bankruptcy trustee Douglas Kelley is still attempting to recover money through so-called “clawback” lawsuits—and he’s now seeking permission to pursue claims overseas.

In a recent court filing, Kelley, the court-appointed trustee overseeing the bankrupt entities previously led by Petters, asked for a judge’s permission to clawback claims in foreign countries. Kelley is tasked with collecting “false profits” that parties may have received from the fraud to be turned over to victims. To collect ill-gotten gains, Kelley has filed hundreds of clawback lawsuits against a wide variety of U.S. defendants, ranging from banks to nonprofits.

According to his recent court filing, Kelley believes that recipients of funds that were tied to the Ponzi scheme may be located in 26 different foreign countries—from Australia to the Bahamas to Belgium. Kelley also noted that as more information is learned, the list of countries may expand.

A hearing on the matter is scheduled for April 23 before U.S. Bankruptcy Judge Gregory Kishel in St. Paul. Kelley told the Wall Street Journal that roughly $63 million has been recovered through the clawback suits to date.