The Tom Petters fraud case

Petters sits in jail 'mortified' yet positive

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: October 15, 2008 - 9:55 PM

Through his lawyer, the entrepreneur says he's worried about his family, business and employees.

The criminal defense attorney for Tom Petters went on the offensive Wednesday, describing a businessman worried about his companies and employees and a family man worried about his family.

"Tom Petters is not Osama bin Laden," said Jon Hopeman, the Minneapolis attorney who was retained three weeks ago to defend Petters against charges of mail fraud, wire fraud, money laundering and obstruction of justice.

The charges stem from a stunningly fast investigation into what federal authorities have described as a $3 billion Ponzi scheme, headed by Petters, which attracted investors with promises of high returns through the purchase and sale of consumer electronics that proved to be fictitious.

Once one the Twin Cities' best-known entrepreneurs whose holdings include Polaroid, Fingerhut and Sun Country Airlines, Petters has remained in federal custody without bail since his arrest on Oct. 3.

"Mr. Petters is doing just fine," Hopeman said Wednesday. "He has spent his whole life as a salesman extraordinaire, and he has a very positive outlook."

Hopeman reiterated that Petters still believes he is innocent and plans to fight the charges despite guilty pleas from three of his business associates who have agreed to cooperate with prosecutors.

Hopeman said he expects a grand jury indictment early next month.

"Only then are we entitled to see the boxes and boxes of evidence the government took from his business and his home," Hopeman said. "Only then will we know who the witnesses will be."

Until then, Hopeman said, "It's like being in a race, but you don't know how far you have to run and what route to take."

Petters has spent his time reflecting while sitting in the Sherburne County jail and has taken to reading some religious material and visiting regularly with a pastor, Hopeman said.

Much of Petters' business empire has been placed under a receivership. Hopeman described Petters as "mortified" about his companies becoming unstable and about the fact that some employees have lost their jobs in the aftermath of the investigation. Petters also is extremely concerned about his family, his lawyer said.

Hopeman released a letter written by Petters' father to Bishop Dennis Schnurr of Duluth over a sermon at a Catholic church in Grand Marais in which the pastor referred to Tom Petters by name as someone who had stolen millions from innocent people.

Fredric Petters was attending church at the time. "I never expected to hear such a falsehood from the pulpit of the church that I love," the elder Petters wrote.

Schnurr could not be reached for comment Wednesday.

Hopeman said he and Petters have been working with court-appointed receiver Doug Kelley to put the various Petters' companies into receivership as well Petters' personal assets. They now will put more attention on the criminal case, Hopeman said.

Asked about the three coworkers who last week pleaded guilty, Hopeman said Petters "has some concerns about that."

"We'll do a complete investigation of them," Hopeman said.

Hopeman said he called several reporters to his office Wednesday afternoon because he felt the need to counteract a serious backlash against his client on the airwaves and the Internet, where bloggers have shown a keen interest in the Petters case.

"The rush to judgment has been such a tsunami," Hopeman said. Asked why, he said, "It's a spectacular fall from grace and it involves someone going from the board room to jail without much pause in between. The amount of money being talked about would catch anyone's eye, and the economy is a big part of it, too."

Hopeman said Petters told him nothing the government does to him will cause more pain than the loss of his son John four years ago when he was murdered in Italy.

"Right now we wait. For Mr. Petters who is used to facing problems and solving them, this is the hardest thing to do," Hopeman said.

David Phelps • 612-673-7269

  • about this series

  • The Star Tribune's coverage of the federal fraud case against entrepreneur Tom Petters and the struggles of Petters-owned Sun Country Airlines.

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