- 2nd - Florida company that invested with Petters files for bankruptcy
- 1st - US attorney drops lawsuit against Indy businessman
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Tom Petters is arrested in Colorado for forgery and fraud.
Petters' prior criminal record is expunged by the Hennepin County District Attorney's office.
Petters Warehouse Direct stores open.
Princeton Bank loaned $700,000 to Ruth Kahn, Kahn was the owner of a business called Deep Draw Manufacturing. Kahn put up unpaid customer invoices as collateral which turned out to be fictitious. When Kahn got caught she assured the bank that her friend Tom Petters owed her a favor and would pay at least $100,000 of the debt. Kahn’s court filings include photocopies of three checks from Petters ranging from $130,000 to $158,000; all three bounced.
Princeton Bank calls in lawyer Garrett Vail. Vail notices Richard Hettler and Tom Petters' names all over loan documents, asks Hennepin County Attorney Amy Klobuchar to investigate
Klobuchar puts Richard Hettler in jail for theft by swindle charges and as a multi-millionaire dead beat dad. Amy Klobuchar gets publicity as defender of women and children as a result. No charges brought against Petters.
Garrett Vail brings Ruth Kahn in for a deposition and Kahn pleads the Fifth.
Garrett Vail brings to the FBI his suspicions that Kahn and Hettler were borrowing money for a larger player; FBI does not investigate.
Petters Forms RedtagBiz.com Inc., an Internet wholesaler, which becomes Redtag Inc., in 2000.
GE Capital discovers that Petters faked Costco receivables but neither Costco nor GE report this fraud to authorities.
Red Tag World merges with RedtagBiz and the organization flows into Redtag, Inc.
An international fund called Lazard Financial Management asked Petters Group’s in-house counsel to explain the CEO’s criminal record.
In response, Petters paid an attorney to have his Colorado record sealed and related fugitive charges in Minnesota expunged.
Hennepin County Attorney orders Tom Petters record expunged of a previous fraud conviction in Colorado. The order required Minneapolis Chief of Police to send fingerprints, thumbprints, other information data, criminal history reports which list the arrest of the defendant and all duplicates of these documents to Tom Petters himself.
Petters Group Worldwide buys uBid Inc. Petters sells majority ownership in 2005 when uBid goes public.
Petters' son, John T. Petters, is stabbed to death in Italy in March while on a study-abroad trip from Ohio University at Miami. Petters creates a nonprofit foundation named after his son to fund an international scholarship.
Judge Montgomery grants a restraining order against Richard Hettler at Tom Petters' request.
PGW is Target's "retailer of the year".
Petters Aviation, formed in August, buys 50 percent of Sun Country Airlines with Whitebox Advisors, a Twin Cities investment firm. Petters increases his stake in Sun Country to 80 percent over the next year.
Montgomery grants Petters’ motion to hold Hettler in contempt of court for posting “inflammatory” material online, and orders that the material in Hettler’s blog be removed.
Petters Real Estate is formed.
Petters makes suspicious bonus payouts. Mary Jeffries was on the list as having received a $1 million bonus, the same as many of Petters' co-conspirators.
ACORN Capital Group LLC of Greenwich, Conn., files a federal lawsuit in New York accusing Petters of defaulting on $273 million in loans.
Deanna Coleman goes to the FBI and accuses Petters of conning lendors for more than 14 years.
Dozens of federal agents raid Petters' headquarters and confront him at a Las Vegas hotel
Petters resigns as chairman and chief executive of Petters Group Worldwide and its affiliates in the wake of the federal criminal investigation into allegations of massive fraud.
White, who is cooperating with federal investigators, is charged in a felony information with mail fraud and money laundering.
Billy Procida meets with Doug Kelley in Minneapolis.
Procida meets with over 90% of Petters’ creditors in Chicago; they interview him and decide they want him to represent their interests as receiver.
An Illinois court names Procida as receiver over Petters’ assets.
Procida tries to contact heads of PGW’s various companies and gets stonewalled, presumably due to Doug Kelley exerting pressure on Petters’ managers not to cooperate with Procida.
Judge Ann Montgomery appoints Doug Kelley as receiver despite Bill Procida’s previous appointment as receiver.
Billy Procida sent home. Doug Kelley remains receiver.
Interlachen Harriet Investments Ltd. files a federal lawsuit against Petters alleging that he bilked funds managed by them out of $60 million in loans that were supposedly secured by electronics merchandise when in fact, no such merchandise existed. Numerous similar lawsuits have followed.
Petters and Reynolds are charged in a felony complaint alleging mail and wire fraud, money laundering and obstruction of justice. In a separate civil proceeding, U.S. District Judge Ann Montgomery orders a freeze on the assets of Petters and his companies.
Petters is arrested and is ordered held without bond in Sherburne County Jail pending the resolution of charges against him. Catain, now cooperating with federal investigators, is charged in a felony information with money laundering conspiracy.
Coleman, who first alerted authorities to the investigation a month earlier, is charged in a felony information with conspiracy.
Montgomery appoints Minneapolis attorney Doug Kelley as a receiver to oversee the Petters companies, excluding Sun Country Airlines, which filed for Chapter 11 bankruptcy protection while it reorganized its debts.
White, Catain and Coleman all enter guilty pleas before U.S. District Judge Paul Magnuson. In a separate courtroom, U.S. Magistrate Judge Jeffrey Keyes determines after a three-hour hearing that Petters is a flight risk and orders him to remain in federal custody without bond.
Minneapolis attorney Doug Kelley, acting as a court-appointed receiver, files Chapter 11 bankruptcy petitions for Petters Co. Inc., and Petters Group Worldwide, in St. Paul.
Reynolds pleads guilty of money laundering conspiracy.
Houlihan Lokey estimates that the value of global Polaroid brand royalties exceeds $1 billion.
Petters is indicted on 20 counts, including conspiracy, mail and wire fraud, and money laundering.
Petters pleads not guilty.
Bernie Madoff arrested for $50 Billion dollar Ponzi scheme, taking some of the media attention/heat off Petters.
Another Petters company, Polaroid Corp., files for Chapter 7 bankruptcy liquidation.
In a process managed by Houlihan Lokey, Polaroid enters into a "stalking horse" deal to sell its most valuable assets to a company controlled by Gerard Lopez for $42 million, less than 5% of Houlihan's $1 billion plus estimate just 5 months earlier. Lopez and his companies have undisclosed connections to Polaroid and Mary Jeffries, CEO of Polaroid.
Kelley, the court-appointed receiver liquidating Petters' business and personal assets, is appointed trustee in the bankruptcies of most of his business entities, including PGW and PCI.
A tumultuous auction for Polaroid managed by Houlihan ended with Judge Kishel declaring liquidators Hilco Consumer Capital of Toronto and Boston-based Gordon Brothers Brands the winner with a bid of approximately $88 million in cash and equity, less than 10% of Houlihan's $1 billion plus estimate just 5 months earlier and more than double the purchase price accepted, upon the recommendation on Houlihan, 3 weeks earlier.
Superseding indictment adds forfeiture allegations.
The Securities and Exchange Commission charges Illinois hedge fund manager Gregory Bell with fraud for allegedly helping Petters fool creditors and investors by making a series of "round trip" payments to Petters. Bell, who ran Lancelot Investment Management, claimed that his investors lost $1.5 billion with Petters.
Day 1 - Opening Statement and Prosecution Begins
Opening statements: Prosecutors lay out their case that Petters orchestrated a multibillion dollar Ponzi scheme. Petters’ defense team argues that it was Petters’ employees and associates who perpetrated the fraud.