Prosecutors zeroed in on Bo Beckman, a Minneapolis money manager who was sued by his own mother.
Jason "Bo" Beckman's promotional materials portrayed him as one of the best money managers in the United States, a man who oversaw the investment of billions of dollars and who beat the performance of the stock market year after year.
But witnesses testifying this week at his federal fraud trial in Minneapolis painted a starkly different picture.
First, a New York financial analyst working with the National Hockey League testified Monday that Beckman was not permitted to buy into the Minnesota Wild because his application raised serious doubts about both his net worth and the way he claimed to have earned his money.
Next, a New York attorney testified Tuesday that he had warned Beckman repeatedly that a currency investment program he and his associates were selling was "riddled with illegalities" and likely a Ponzi scheme. He said the money must be returned to investors immediately. And he advised Beckman not to persist in his claim to have billions of dollars in assets under management.
Then a lawyer from Champlin testified that Beckman had ripped off hundreds of thousands of dollars from his own grandfather's estate, money that should have gone to his mother and two aunts. Beckman used the money to pay off loans on cars, a boat, and a home equity line of credit. Despite a legal settlement, the estate lost more than $100,000, the lawyer said.
Wednesday, jurors are expected to hear about that subject directly from Beckman's mother, Sandra Peterson, 66, of Anoka.
"I haven't seen him in like, seven years," Peterson said Tuesday afternoon after Beckman walked by her with his attorney, Douglas Altman. "He didn't acknowledge me," she said.
Beckman, 42, of Plymouth, is one of three men standing trial in connection with Trevor Cook's $194 million Ponzi scheme. The other defendants are Gerald Durand, 61, of Faribault, and Patrick Kiley, 73, of Minneapolis. Each defendant faces various counts of wire and mail fraud, money laundering and conspiracy. Beckman and Durand also face several tax charges.
Cook, 39, of Apple Valley, pleaded guilty two years ago and is serving a 25-year term in federal prison.
Another former business associate, Christopher Pettengill, 55, of Plymouth, pleaded guilty in June to securities fraud, wire fraud conspiracy and money laundering.
Pettengill, who's cooperating with the prosecution in hopes of a lighter sentence, is scheduled to testify Wednesday about what Cook's operation looked like from the inside.
Martin Klotz, an attorney with the Manhattan law firm of Willkie, Farr & Gallagher, testified Tuesday that the operation looked "ridiculous" on its face. He said Beckman hired him in 2008 to represent Oxford Global Advisors, one of several entities Cook and his associates used to pitch investments in foreign currencies. He said that Beckman claimed to own nearly all of the company, and that Pettengill had a minor stake.
Beckman wanted to find out if the currency program was being run in a legal manner, Klotz said. After listening to Beckman's description of how the investment worked -- relying on Islamic banks to forgo interest on loans for religious reasons -- Klotz said he told Beckman it couldn't work.
"The notion that somebody would give you money for nothing, that isn't the way it works. And if it was this easy to make money, someone at Goldman Sachs would've figured it out 30 years ago," Klotz said. "I felt that the investment program was infected with legal missteps from the outset and had to be terminated."
In July 2008, Beckman wrote Klotz an e-mail pressing him to meet with Cook for a better explanation of the program.
Klotz replied: "Under the most optimistic analysis of what happened here, however, the FX [foreign currency] investment program is riddled with illegalities; illegal sale of unregistered securities, inadequate or misleading disclosures to clients, both about the investment product and about the fees, and transactions by unlicensed persons and entities, to take the most obvious examples."
After meeting with Cook in August 2008, Klotz said he advised Beckman to get away from him.
"In substance, I said I think this guy is a crook. I think he's likely running a Ponzi scheme. I think you need to put as much distance between you and this guy as you possibly can."
Dan Browning • 612-673-4493
Poll: Can the Wild rally to win its playoff series against Colorado?