The criminal trial of alleged Petters financier James Fry is theoretically at the halfway point, but the expected headline witnesses have yet to enter the St. Paul courtroom of U.S. District Judge Richard Kyle.
As the estimated three-week trial wades through week two, jurors have learned about the banking laws of Bermuda, hedge fund investing and the intricacies of promissory note financing.
Jurors have heard from employees of Fry's Arrowhead Capital Management and, on Wednesday, the FBI agent who investigated Fry's ties to convicted Wayzata businessman Tom Petters.
But the person who FBI agent Ruth Hovey identified as the one who made Fry the target of a criminal investigation, former Arrowhead executive Michelle Palm, has yet to take the witness stand.
Palm, who pleaded guilty to providing false information to investors and making false statements to the Securities and Exchange Commission more than two years ago, is expected to testify Thursday.
Also absent from the trial so far is Deanna Coleman, the Petters confidante who blew the whistle on the $3.65 billion Ponzi scheme in 2008 and unveiled the largest criminal fraud case in state history.
And then there is the question of where is Frank Vennes Jr., the born-again ex-convict who introduced Fry to Petters and served as the money conduit between the two for nearly 10 years?
It is unclear whether either the prosecution or the defense will call Vennes to the witness stand even though he was a central player in the Petters operation.
Fry, 59, faces 12 counts of wire and securities fraud and giving false statements to the SEC, basically the same charges to which Palm pleaded guilty.
Fry denies government allegations he hid Vennes' role in the Petters relationship from investors so they wouldn't be spooked by someone with a criminal record including money laundering involved in transactions with their funds. The government also alleges Fry failed to tell investors when payments from Petters were later than usual.
David Phelps • 612-673-7269
