Government takes Tom Petters' homes

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: March 24, 2010 - 7:59 PM

Judge orders forfeiture of his former homes, including one where his girlfriend lives, to compensate victims of Ponzi scheme.

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Tom Petters

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Expensive homes once owned by Tom Petters were officially forfeited to the U.S. government Wednesday.

U.S. District Judge Richard Kyle granted the government's motion to obtain Petters' remaining real estate holdings and several bank accounts to help compensate victims of Petters' $3.65 billion Ponzi scheme for which he was convicted late last year.

The properties include his former primary residence in Wayzata, the Plymouth home where his girlfriend and two young children currently live and a Florida home.

Kyle said he believed it unlikely that Petters will succeed on appeal to reverse his conviction and noted that the properties were purchased with "ill-gotten gains."

Kyle said there was no indication that Petters' girlfriend and the mother of his two children would be unable to find alternative housing.

The Lake Minnetonka home in Wayzata has been on the market for more than a year. Its most recent listing was for $6.25 million.

Court-appointed receiver Doug Kelley has been disposing of Petters' personal and corporate assets, as well as the assets of Petters' co-defendants in the case, and pooling the proceeds for distribution to victims. The recovered assets represent only a small fraction of the losses, but Kelley said the goal is "to maximize the return to the victims."

Kelley already has sold a residence in Colorado, a mansion in Florida and a resort in northern Wisconsin.

Kyle said most of the properties sought by the government are unlikely to have "intrinsic value" to Petters, who faces a life sentence for his 20-count conviction.

"While one was his primary residence, he no longer resides there, having been in custody since his arrest in connection with this case," Kyle wrote.

Kyle said the displacement of Petters' girlfriend, Tracy Mixon, and the children "are due to defendant's massive fraud and are not this court's primary concern."

David Phelps • 612-673-7269

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