Petters Group Worldwide
Petters Group Worldwide Under FireAsset-based lending hedge fund firms are organizing to try to get their money back from a company executive who was tossed into jail for allegedly masterminding a $2 billion fraud.
Tom Petters, the founder and former head of Minneapolis-based Petters Group Worldwide, was sent to jail Friday to await a hearing on Tuesday, after the FBI raided his business and home last week. Petters was charged with taking investment dollars to back a venture where expensive retail items, like wide-screen TVs, were bought from wholesalers and sold to discount chains. The whole thing turned out to be a fake, according to the charges.
The FBI, working with a confidential informant, got one of Petters’ co-conspirators on tape saying that the fraud could amount to more than $2 billion.
In court papers asking the judge to deny bail for Petters, the U.S. Attorney’s office claimed that he was going to flee. Petters also encouraged someone who might be a potential witness against him to leave the country, the government charged.
A group of investors that had about $3 billion in loans to various Petters entities went into state court in Illinois Friday and had a receiver appointed to sort out the mess, according to a report in the Star Tribune. It remains to be seen, however, how the Illinois court can claim jurisdiction over Petters companies, which are based in Minnesota. Source.