Prosecutors: Petters expressed shame for fraudby Elizabeth Dunbar, Minnesota Public Radio
St. Paul, Minn. — Tom Petters sent flowers to his business associate more than two years before he was arrested in a multi-billion dollar fraud scheme, expressing shame and promising to fix their company, according to an e-mail cited by prosecutors in a new court filing.
"I ask daily to be able to get up and have God to help me change this company into one we are so proud of instead of full of shame!" Petters wrote in the e-mail to Deanna Coleman dated April 1, 2006.
The e-mail was one of several details federal prosecutors gave Wednesday as they outlined the case against Petters, who is accused in a large Ponzi scheme in which he allegedly paid his investors with funds from newly recruited investors.
Petters' trial is scheduled to begin Oct. 26, although his attorneys have renewed a request that the trial be moved out of state because they said widespread media coverage in the case would prevent him from getting a fair trial in Minnesota.
"We're going to persist in that request," defense attorney Jon Hopeman said Thursday, citing "inflammatory publicity, out-of-control comments on the blogs, and hatred" toward his client.
Petters, who is currently being held in the Sherburne County jail, has been in custody since his arrest in October 2008.
According to prosecutors, the e-mail to Coleman demonstrated how Petters repeatedly told his associates that he would figure out a way for them to escape the fraud at Petters Co. Inc. (PCI), and Coleman revealed the alleged scheme to the U.S. Attorney's office in September 2008, prosecutors said in the new court filing.
A search a few weeks later by law enforcement at the company's headquarters eventually revealed that PCI owed billions to its investors but didn't have the assets to pay its debts, prosecutors said.
The government's case outline also detailed how Petters had been questioned along the way, especially when PCI began using institutional investors for his business. General Electric Credit Corporation in 1998 agreed to provide PCI with a $50 million credit line, court documents said.
But GECC became concerned in 2000 when PCI repaid some of its promissory notes late. Officials questioned Petters and even sent a purchase order verification directly to one of Petters' retailers -- Costco -- which told them the purchase orders didn't exist, prosecutors said.
Petters angrily attacked GECC for directly contacting Costco instead of working with one of his business associates, prosecutors said. About two years later, Petters paid off his debt with GECC and the credit line was ended. Court documents said it happened after Petters refused to let the company contact his bank directly to verify some information.
Hopeman declined to comment on the government's new court filing.
Prosecutors have already reached plea agreements with Deanna Coleman and five other business associates of Petters.
Before being arrested and charged, Petters' company had majority holdings in Sun Country Airlines and had acquired Polaroid through a merger.