Jacobs, Deikel tell of trouble dealing with Petters
St. Paul, Minn. (AP) — Two prominent Minnesota businessmen testified Friday morning at the fraud trial of Tom Petters, who is accused of orchestrating a multi-billion-dollar Ponzi scheme.
Irwin Jacobs and Ted Deikel both told the court that they had trouble getting Petters to repay loans they had made to him and his businesses.
Jacobs testified that Petters was so late in repaying him for a deal in 1998 that Jacobs threatened to foreclose. That deal involved the sale of Jacobs' liquidation stores to Petters.
Jacobs acknowledged he did eventually get paid.
Prosecutors didn't try to directly tie the Jacobs deal to Petters' alleged $3.65 billion Ponzi scheme. But prosecutors contend Petters used money from the scheme to keep his other businesses afloat.
Deikel said he came to trust Tom Petters as a close friend, but that was before he lost $7.5 million in Petters' alleged scheme.
Deikel testified that he had grown comfortable with Petters through two earlier deals.
Deikel said he invested $3 million with Petters Co. Inc. in 2000 and earned a $180,000 profit. And he told how Petters helped him buy back direct retailer Fingerhut from Federated Department Stores in 2002.
So Deikel said he had few qualms when he agreed to invest $10 million with PCI in early 2008.
Deikel said he became concerned when he didn't get his money repaid last fall. He said Petters kept making excuses, but did pay him $2.5 million. However, Deikel never got back the remaining $7.5 million before agents raided Petters' operations in 2008.
Petters faces 20 counts, including wire fraud, mail fraud, money laundering and conspiracy. Petters' attorneys have said he is innocent.