business

An appeal is almost a certainty in the conviction of Wayzata businessman Tom Petters on charges that he orchestrated a $3.65 billion Ponzi scheme. But the likelihood of success is a more muddled picture.

Criminal attorneys said Petters has nothing to lose by asking the Eighth U.S. Circuit Court of Appeals to overturn his conviction, setting in motion a process that could take up to a year.

"You always appeal a major criminal conviction," said Don Lewis, a former federal prosecutor and dean of the Hamline University School of Law. "The problem is, there are no cutting-edge legal issues" in the Petters case.

Petters' attorneys, Jon Hopeman and Paul Engh, were unavailable for comment, although Hopeman told the Associated Press on Thursday that they plan to appeal and that the case is "far from over."

One of the possible appeal issues involves the testimony of Petters co-conspirator Larry Reynolds, a onetime Boston-area felon who was placed in the federal witness protection program after he became a cooperating witness in a mid-1980s mob case.

Engh and Hopeman asserted that they needed to document the government's supervision of Reynolds while he was in the program in light of his subsequent criminal involvement with Petters. The defense claimed that Petters was duped by Reynolds and other co-defendants.

The Petters team moved for a mistrial midway through the trial when Judge Richard Kyle limited their line of questioning when it came to the witness protection program.

"It's clear from pre-trial motions and when Reynolds was on the witness stand that this is one of the issues to raise," said Ted Sampsell-Jones, a criminal law professor at William Mitchell College of Law. "But Reynolds wasn't as important ... for the government as were the e-mails, tape recordings and testimony of [informant] Deanna Coleman."

Lewis said appeals courts tend to defer to the district court judge where there are rulings on the admissibility of evidence or testimony.

"Even if the court of appeals concludes there might have been some evidence that was not admitted, it will do "a harmless-error analysis. In other words, does it matter?"

Sampsell-Jones said "very rarely" does an appeals court reverse a ruling on evidence admissibility. "I don't think it's there in this case," he said.

Any appeal would be filed after Petters is sentenced in a couple of months. Then the appeal process would require briefs from the defense and the government and oral arguments before a three-judge panel, all of which could take up to a year.

Sampsell-Jones said the Eighth Circuit appeals court has a reputation for being pro-government when it comes to criminal cases, which could affect a Petters appeal.

If Petters loses on appeal, he could then ask for a hearing before the entire Eighth Circuit panel, or appeal to the U.S. Supreme Court.

Hopeman and Engh are both considered to be accomplished trial lawyers, so they could handle the appeal themselves or bring in another appellate specialist, attorneys said.

On the matter of cost of an appeal, Petters' legal fees are covered by an officers and directors insurance policy for Petters Group Worldwide that covers legal costs until "final adjudication," which is interpreted to mean the end of an appeal.

Petters was convicted on Wednesday of 20 counts of mail and wire fraud, money laundering and conspiracy. He faces a prison sentence of 30 years to life, according to federal sentencing guidelines.

David Phelps • 612-673-7269