Bo Beckman didn't look up as his mother was sworn in. Later, a witness said big Ponzi scheme was built on lies "plucked from air."
Jason "Bo" Beckman's mother testified Wednesday in Minneapolis that long before he was accused of defrauding investors in Trevor Cook's $194 million Ponzi scheme, her son had bilked her and her sisters out of much of their inheritance.
Sandra Peterson told a reporter she didn't want to testify and was doing so in response to a subpoena. Beckman didn't look up as she was sworn in and stepped up into the witness stand beside Chief U.S. District Judge Michael Davis.
Beckman, 42, of Plymouth, is one of three defendants on trial in his courtroom for allegedly helping Cook to defraud more than 700 investors, mostly elderly retirees. Cook is serving a 25-year federal prison term after pleading guilty in 2010.
Assistant U.S. Attorney Tracy Perzel asked Peterson about problems that developed when Beckman was handling her late father's estate in 2000. The testimony related to charges that Beckman attempted to defraud the National Hockey League several years ago when he was trying to buy a piece of the Minnesota Wild. He initially failed to disclose to the NHL that Peterson had sued him for fraud, and later tried to explain it away in a letter to the league.
Peterson, 66, of Anoka, denied Beckman's claim in that letter that she had authorized him to open a Merrill Lynch trading account when he worked there and that she engaged in high-risk trading of tech stocks.
The money for the trading account came from a $104,443 certificate of deposit her father had left in her name. Peterson, who lives on Social Security payments, said she couldn't afford to risk money in the stock market and didn't know about the account. She also denied authorizing Beckman to use two of her vehicles as collateral for loans, and she denied authorizing him to take out a mortgage against his grandfather's house.
Peterson said she learned about the mortgage only after she asked Beckman for some money from the estate. "He said, 'It's gone. There wasn't that much there. Forget about it,'" she said.
Peterson said she learned that Beckman had used much of the equity from the estate to pay for golf outings, a Florida time-share, and to pay off loans on two cars, a boat, and a home equity line of credit. She sued him and reached a settlement covering part of her losses.
Douglas Altman, Beckman's attorney, asked if her signature was on an application to open the trading account, on the cashier's check that funded it, as well as other papers related to the estate. "It appears to be," she said.
"Can I assume there's no love lost between you and your son," Altman asked.
"I love my son," she said firmly.
Perzel asked if Beckman sometimes had her sign papers she didn't understand.
"I signed a lot of papers for Bo. I trusted him. He's my son."
Jason Hedeen testified that he tried to raise money for Beckman's money management company, Oxford Private Client Group, but became suspicious about claims Beckman made to prospective clients. At one meeting, he said, Beckman claimed his company had raised $4 billion in six years.
"It was not only a lie, it was extremely comical. It was ridiculous. It was an extremely stupid comment," Hedeen said.
Hedeen said he raised concerns about Cook and suggested that Beckman break away from him. "He said, 'Well, if you don't like it, you can quit. Today can be your last day.'"
Christopher Pettengill, a former insider who has pleaded guilty in the scheme, spent more than five hours on the stand. He testified that nearly everyone who worked with Cook knew that he was a drunk and a degenerate and that his investment scheme was based on hype and fraud.
Pettengill said he went along with the scheme after losing $1 million in Cook's currency investment program. He said he was trying to earn $2 million in time for his 25th wedding anniversary so he could buy out his brother's interest in a Cape Cod vacation home they had inherited.
Pettengill, 55, of Plymouth, faces up to 20 years in prison for his crimes, though he hopes to get a break by cooperating.
He testified that he, Cook, Beckman and co-defendants Gerald Durand and Patrick Kiley lied to potential clients about the safety of the investment program, misrepresented their experience, spent client money and moved it around for inappropriate purposes, and conspired to cover up the alleged frauds.
Asked how they came up with marketing materials and how they determined ownership in the companies, Pettengill said: "It's what I call the PFA method -- plucked from air."
Dan Browning • 612-673-4493