Tom Petters gets 50 Year Sentence for $3.6 Billion Ponzi Scheme
The sentence is substantially lower than the 335 years sought by prosecutors. When Mr. Petters’ massive empire unraveled, the losses were $3.6 billion. Investors include pastors, missionaries, retirees and nursing home residents, among others. Several months ago, a jury convicted the prior owner of Polaroid on 20 counts of mail and wire fraud, money laundering, and conspiracy.
The scheme has been compared to the Ponzi run by Bernie Madoff, who received a sentence of 150 years in prison after pleading guilty to a scheme that cost investors billions of dollars.
Petters intends to file an appeal. He also disputes that what happened was a Ponzi scheme. Petters testified that he had thought Petters Co. Inc., an arm of his now bankrupt Petters Group Worldwide, was doing legitimate deals.
PCI apparently used fake purchase orders and bogus bank records to persuade investors to finance what they were told would be purchases of electronics such as big-screen televisions that PCI would resell to discount retailer. But the merchandise never existed and the sales never took place.
Petters blamed other business associates, who all pleaded guilty in hopes of leniency and said his biggest mistake was trusting them.
This is an example of yet another Ponzi scheme that was able to operate during the last decade of weak securities regulation.