Petters Group Worldwide
Encyclopedia
Petters Group Worldwide was a diversified company based in Minnetonka, Minnesota
that was turned into a $3.65 billion Ponzi scheme
by its founder and CEO, Tom Petters
. It currently has 3,200 employees and investments or full ownership in 60 companies, of which it actively managed 20, with offices in North America, South America, Asia, and Europe. Among its assets are Sun Country Airlines
, Petters Warehouse Direct, and the remnants of Polaroid
. Petters Group Worldwide had $2.3 billion in revenue in 2007.
On September 24, 2008, its headquarters and the homes of its top executives and some associated businesses were raided by the FBI. Wiretaps based on information gleaned from a confidential co-conspirator
are alleged to detail the existence of a $2 billion investment fraud. The allegations include creating phony purchase orders from Sam's Club
and BJ's
to create the appearance of tremendous sales of merchandise. CEO Tom Petters
is the central figure in the investigation. A federal court appointed Doug Kelley, a lawyer, as receiver for the Petters companies, excluding bankrupt Sun Country.
On October 13, 2008, Petters Group Worldwide filed for Chapter 11 bankruptcy
.
On December 2, 2009, Tom Petters was convicted on all counts related to this Ponzi scheme.
On April 8, 2010, Thomas J. Petters was sentenced to 50 years in federal prison for all counts related to running the Ponzi Scheme.
In early November 2010, the Hennepin County attorney's office filed drug possession charges against former Petters Group General Counsel David Baer, based on a safe full of illegal drugs under his office desk allegedly found by federal agents during the Sept. 24, 2008 raid.
Minnetonka, Minnesota
As of the census of 2000, there were 51,301 people, 21,393 households, and 14,097 families residing in the city. The population density was 1,893.0 persons per square mile . There were 22,228 housing units at an average density of 818.9 per square mile...
that was turned into a $3.65 billion Ponzi scheme
Ponzi scheme
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation...
by its founder and CEO, Tom Petters
Tom Petters
Thomas Joseph Petters is an American business man and the former CEO and chairman of Petters Group Worldwide. Petters resigned his position as CEO on September 29, 2008, amid mounting criminal investigations...
. It currently has 3,200 employees and investments or full ownership in 60 companies, of which it actively managed 20, with offices in North America, South America, Asia, and Europe. Among its assets are Sun Country Airlines
Sun Country Airlines
MN Airlines, LLC, operating as Sun Country Airlines, is an American low-cost airline headquartered in the Minneapolis-St. Paul suburb of Mendota Heights, Minnesota...
, Petters Warehouse Direct, and the remnants of Polaroid
Polaroid Corporation
Polaroid Corporation is an American-based international consumer electronics and eyewear company, originally founded in 1937 by Edwin H. Land. It is most famous for its instant film cameras, which reached the market in 1948, and continued to be the company's flagship product line until the February...
. Petters Group Worldwide had $2.3 billion in revenue in 2007.
On September 24, 2008, its headquarters and the homes of its top executives and some associated businesses were raided by the FBI. Wiretaps based on information gleaned from a confidential co-conspirator
Conspiracy (crime)
In the criminal law, a conspiracy is an agreement between two or more persons to break the law at some time in the future, and, in some cases, with at least one overt act in furtherance of that agreement...
are alleged to detail the existence of a $2 billion investment fraud. The allegations include creating phony purchase orders from Sam's Club
Sam's Club
Sam's Club is a chain of membership-only retail warehouse clubs owned and operated by Wal-Mart Stores, Inc., founded in 1983 and named after Wal-Mart founder Sam Walton. , the Sam's Club chain serves more than 47 million U.S. members...
and BJ's
BJ's Wholesale Club
BJ's Wholesale Club, Inc. , commonly referred to simply as BJ's, is a membership-only warehouse club chain operating on the United States East Coast, as well as in the state of Ohio...
to create the appearance of tremendous sales of merchandise. CEO Tom Petters
Tom Petters
Thomas Joseph Petters is an American business man and the former CEO and chairman of Petters Group Worldwide. Petters resigned his position as CEO on September 29, 2008, amid mounting criminal investigations...
is the central figure in the investigation. A federal court appointed Doug Kelley, a lawyer, as receiver for the Petters companies, excluding bankrupt Sun Country.
On October 13, 2008, Petters Group Worldwide filed for Chapter 11 bankruptcy
Chapter 11, Title 11, United States Code
Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to every business, whether organized as a corporation or sole proprietorship, and to individuals, although it is most...
.
On December 2, 2009, Tom Petters was convicted on all counts related to this Ponzi scheme.
On April 8, 2010, Thomas J. Petters was sentenced to 50 years in federal prison for all counts related to running the Ponzi Scheme.
In early November 2010, the Hennepin County attorney's office filed drug possession charges against former Petters Group General Counsel David Baer, based on a safe full of illegal drugs under his office desk allegedly found by federal agents during the Sept. 24, 2008 raid.