Thomas J. Petters, Ponzi Scheme, Minnesota 2008

MINNEAPOLIS – In one of the nation’s largest and most complex Ponzi schemes, more than $722 million was distributed to victims and creditors after the receivership of Thomas J. Petters was closed.

United States District Judge Ann D. Montgomery issued an order closing the receivership of Thomas J. Petters, discharging the Receiver in the case. The Receiver, Douglas A. Kelley, immediately took control of the assets and property owned by Petters and the other named defendants.

Petters and the other defendants created a vast web of more than 150 entities over the course of thirteen years – entities that were all propped up by fraud. Some of the entities, however, were legitimate businesses that employed innocent persons.

The Receiver placed several of the major entities into bankruptcy, including Sun Country Airlines and Polaroid Corporation, for the protection of innocent employees and creditors. Throughout the receivership, the Receiver also managed real estate, categorized assets, liquidated property, paid employees, commenced claw-back litigation, entered into settlement agreements, and worked in coordination with the bankruptcy and government forfeiture process to achieve an orderly disentanglement of the fraud.

“Following the criminal conviction of Tom Petters in 2009 for orchestrating a $1.9 billion Ponzi scheme, the work of recovering assets on behalf of victim investors and creditors had just begun,” said Acting U.S. Attorney W. Anders Folk. “Throughout this case the U.S. Attorney’s Office sought to remain transparent, thorough, and persistent in our pursuit of justice. I commend the work of the Receiver and all parties involved in recovering more than $722 million on behalf of victims.”

Petters was indicted on multiple counts of mail fraud, wire fraud, money laundering, and conspiracy for orchestrating a $1.9 billion Ponzi scheme. On December 2, 2009, a federal jury found Petters guilty of all 20 counts against him, and he was later sentenced by U.S. District Judge Richard H. Kyle to 50 years in federal prison.

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