Thursday will be a big day for Tom Petters, the Twin Cities businessman accused of running a $3 billion investment fraud scheme for 13 years.
Petters is scheduled to appear before Chief U.S. District Judge Michael Davis in Minneapolis in an effort to overturn an earlier ruling that Petters be held until the charges against him are resolved.
It's also the day that a top figure in the alleged scheme, Larry Reynolds, is expected to plead guilty in front of U.S. District Judge Paul Magnuson in St. Paul, according to pleadings filed Monday by federal prosecutors.
Petters is among the Twin Cities' best-known entrepreneurs. His holdings include Polaroid, Fingerhut and Sun Country Airlines.
Reynolds, 65, of Las Vegas, is being held in protective custody. He allegedly helped launder cash that Petters had obtained from investors who thought he was buying electronics merchandise and selling it for a profit to big-box retailers.
The government says no such merchandise existed and that Petters used the money for other businesses, to pay debts and to maintain a lavish lifestyle.
If Reynolds goes through with the plea, he'll be joining Robert White, a former employee and consultant to Petters; Deanna Coleman, a former executive and government informant, and Michael Catain, a former business associate. Each of his "conspirators" has said that Petters was "the leader of this enormous fraud scheme," Assistant U.S. Attorney John Marti said in arguing to continue holding Petters without bond. Petters' attorneys say he should be released to help prepare his defense.
Dan Browning • 612-673-4493