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To better understand the alleged Petters Ponzi scheme, watch this video:

Why two receivers? Watch this video to understand how it came to happen:

Conflict of interest? Watch this video for a comparison between Madoff and Petters:

This could have been prevented. Petters’ criminal record was expunged in 1994:

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16 Responses to “The Petters Ponzi Scheme”

  1. John Welbes says:

    Who runs this website? Who supports it? Just curious. Please contact me. Thx, John Welbes, Reporter, St. Paul Pioneer Press. (By the way, you can find complete coverage of the trial at http://www.twincities.com.)

  2. Buffy says:

    Mary Jeffries was the whistle blower along with Doug Kelly and they figured out how to make money in the process …. someone went to Deanna with info and she hired Alan Kaplan who knows all involved Deanna would have never been smart enough to pick alan – jeffries and kelly worked with the FEDS to get this deal.. Strib wont report anything i know personally that Mary was the pitch person for Tom with the Investors and she bullshited the value of investments all the time – she was what made him legitmate

  3. EIDAHOE says:

    Listen up ,Johnny.The strib and also the pioneer press do not report all the facts ,because they are TOLD they cant. This site seems very informative and on the ball. I hope they don’t contact you ,as the Press would ruin it.
    And Fluffy or whatever ,I hope you meant that Mary was his front man,and her mission was to have him “perceived” as legitamate. I dont know where you sit on this thing,but I would be the first guy in line to throw the switch(if this spineless state would have the death penalty ,to be CARRIED OUT , within 2 yrs of sentencing) and I would also try to save money by getting Trevor Cook /Denny and Tommy all in the same room for there last breath ,same day.!!! If there is support for this ,make room for Bernie too!

  4. EIDAHOE says:

    Finally…..A little justice !!!! I am soo glad that a guilty verdict is in. I was worried that Petters would be golfing with a murderer sipping gin and tonics ,as O.J. beat the system and is still walking this earth,unfortunatley.Not going to happen for Tommy.Think about all the money that this state will have to shell out to keep Petters alive ,in prison.The Death penalty needs to be activated and restructured………NOW.
    Thanks for having this website,whoever you are.

  5. Jeffrey J. says:

    I just want to vomit after listening to the audio and written transcripts of these secretly recorded conversations. My widowed 63 year old mother was defrauded out of 600K. That was the bulk of her retirement after selflessly giving her entire life to the care of a quadrepeligic father. We already knew Petters was a crook and scumbag. But it is absolutely baffling that Mary Jeffries was not called to testify, nor was she indicted for any charges. You can hear her on one of the tapes (I have only listened to two and half so far) talk to Petters about pimping for a short-term loan w/ 30-75% interest as though it’s a normal occurence! She was in charge of PCI and knew exactly what was going on. I hope she’s living it up with mom’s pension.

    JJ

    http://static.cbslocal.com/station/wcco/news/local/petterstrialexhibits/11A.pdf

  6. Doug says:

    Why wasn’t the 10th ad published in the Strib Friday?

  7. Concerned says:

    Why was ad 10 not in the star trib on friday? did you cancel? were you censored? how many more ads are you running?

  8. Mary J at the center says:

    why was Mary Jeffries not charged as COO of PCI the fraud machine? why did she not testify at the petters trial? it appears she was behind raising the money from many sources? it appears she was allowed to keep her million $ bonuses from PCI why? It seems D Kelley and her cut a deal – what was the deal? John W why are you not reporting on this? where is David Phelps on this? Why do the twin city papers look the other way?

  9. Kelley's G Force says:

    The Petters case appears to mimic the abuse in the case below – when are reporters going to wake up on this forfeiture issue?

    Gang Force seizures prompt look at law

    A defense lawyer points to unfairness, potential for abuse at legislative hearing prompted by Metro Gang Strike Force actions.

    By PAT DOYLE, Star Tribune
    Last update: October 29, 2009 – 10:35 PM
    A state law allowing police acting on their own to seize property from suspects — often without getting warrants — is unfair and should be overhauled, defense attorneys told legislators Thursday.

    “This creates a potential for abuse,” said lawyer Howard Bass. “There’s no checks and balances.”

    His testimony came before legislative committees on public safety investigating the state’s seizure and forfeiture law after allegations that the Metro Gang Strike Force improperly used it to seize money, cars and property.

    Although Rep. Debra Hilstrom, DFL-Brooklyn Center, said legislators weren’t ready to hear recommendations for changes, they got some.

    Bass said the government should have to prove the property was related to a crime and deserved to be seized. Currently, property can be forfeited in an administrative procedure unless the owner demands a court hearing within 60 days of its seizure.

    And the court process is complicated. Property owners need to serve proper notice on the police agency and follow court rules of civil procedure and discovery.

    Sometimes people who have not been charged with a crime don’t challenge seizures because it would cost more in attorney fees than the property is worth, said Tom Plunkett, an attorney with the Minnesota Association of Criminal Defense Lawyers.

    Also, people challenging seizures in civil court waive protections against self-incrimination, exposing themselves to charges.

    A man testified that the Strike Force took his truck and $4,000 in 2006 in connection with a drug investigation even though he wasn’t charged. Terrance Frelix of Minneapolis said he tried to get it back, but, “to this date, I still haven’t received anything.”

    Adrian Ramiraz testified that the Strike Force seized his house in Crystal in 2008, though he, too, wasn’t charged. He said he hasn’t been able to recover it.
    Hilstrom assured police and sheriffs in the room that the committee didn’t intend to “paint a broad brush picture” of how the seizure and forfeiture law has been used.

    Changes in statute urged

    Still, activities by other police units have raised broader questions about the law itself.

    A judge recently ordered Edina police to return an SUV to a woman after they seized the vehicle when her son was charged with driving it while impaired. Authorities held it for five months and said their actions were legal.

    Her lawyer has called for changes in the statute.

    At the legislative hearing, sheriffs and police defended the law, saying it provided money for law enforcement training and equipment. They portrayed the Gang Strike Force problems as isolated.

    “It isn’t the statute that’s failed,” said Apple Valley police Capt. Michael Marben. “It’s the lack of accountability.”

    It was a theme sounded by Rep. Tony Cornish, R-Good Thunder, the police chief of Lake Crystal, who advised colleagues not to overhaul the statute.

    Another legislator suggested problems with the Gang Strike Force could have been detected with better enforcement of a provision of the law requiring police agencies to report all seizures to the state auditor’s office. Sen. Julianne Ortman, R-Chanhassen, pressed Auditor Rebecca Otto on why her office didn’t disclose that the Gang Strike Force and other units failed to comply with the reporting requirement.

    Otto replied that the statute doesn’t give her office authority to enforce the requirement and that her office has never reported agencies that failed to comply with it. But she said she’d be willing to do so in the future.

    Patrick Doyle • 651-222-1210

  10. Dale says:

    Collusion on many levels. If they charged everyone who is guilty of knowingly aiding and abetting Tom Petters and his organization, Minneapolis would be short on attorneys. Keep up the good work and keep digging because there certainly are other individuals responsible for allowing Tom Petters criminal activities to thrive.

  11. Jeffrey says:

    Dale is absolutely right. You guys touched a nerve, which is why the Star and Trib censored your article. It’s just not fair that Tom Petters takes the fall when there are so many other colluders. If only a deal could be made whereby Petters talks but gets a relatively light sentence. This is just too damn convenient; people can put a name and face on the crime so they figure it is just ‘Tom Petters crime.’ Thanks for your incredible reporting and good work.

  12. EIDAHOE says:

    Like I said before,the star and the pioneer press print only what they are TOLD they can. Who tells them that? The chief editor ? No. The same people in position to make the decisions without there name being published. How far up the chain does it go ? The gang task force……the petters trial….. Bernie Made -off… Iran… ,these things all have something in common.Behind the scenes.Its all politics. Somebody said ,ok ,stop digging ,we got enough on Petters. How was he able to ponzi around for 10 years? High up investors ,thats how. Politically motivated . Same as the previous issues I mentioned. Go up against the s e c and ask why Bernie operated for so long without a scratch? Ask Petters who held the broom to sweep up his mess? He probably doesn’t even know who.Ask Pawlenty who let the gang task force ,( a great idea by the way to have in this state and MUCH NEEDED and did rid us of some bad elements,and needs to be continued under NEW management) run without strict conduct and procedures for accountability ? The supreme leader tells the President in Iran how things are going to be.Who tells him? Its all about digging and then someone taking your shovel away from you.
    There is alot more to the Petters scoop than what we read ,and it would be nice if somebody is held accountable. Politics and coruption ,that is what needs to be cleaned up. Of course somebody has to take the fall ,but lets get to the broom holder,not the dust pan holder.

  13. Dale says:

    Oh, and the obvious collusion involving the lawyers and judges in the receivership and bankruptcy cases. It is/was the good o’le boys club, looking out for one another while zipping their lips. There is conflict of interests all over this case. Conflicts that should never have been waived by the government and/or a judge and if not waived should most certainly be challenged. Keep the digging up – the ring of thieves in the Minneapolis legal community is thick. After all, wasn’t Tom Hay dissbarred (or politely let his license lapse) because he was involved in insider stock trading while at Dorsey Whitney? He was after all quitely asked to leave the firm and went directly to work for Tom Petters. All roads to this legal cluster f#$# lead directly back to the lawyers and law firms involved.

  14. What about the Victims? says:

    Why is the press not reporting on the plight of the victims. Creditors ranging from homemakers to large hedgefunds (whos money often originates from hard working individuals) have not seen a nickle from this receivership.

  15. Richard Hettler says:

    why is Judge Montgomery no longer referenced on this website?

    why is Judge Gregory KIshel no longer referenced on this website?

  16. Censored in Minnesota says:

    Who called the Star Trib and had this Ad series killed? Was it someone from from Klobuchar’s office? Doug Kelley?

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