Murder plot adds twist to $194 million Ponzi scheme

  • Article by: DAVID CHANEN , Star Tribune
  • Updated: December 27, 2012 - 10:29 PM

Pair allegedly talked of killing co-defendant to cash in insurance policy.

Jason “Bo” Beckman
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Jason “Bo” Beckman

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Federal prosecutors this week revealed a plot to murder a co-defendant involved in the second-largest Ponzi scheme in Minnesota history, saying in court documents they have a mountain of evidence to prove it.

In a motion filed Wednesday, the U.S. attorney's office said that Gerald Durand proposed to Christopher Pettengill that they arrange for the killing of Jason "Bo" Beckman in order to collect and split the proceeds of his life insurance policy. Prosecutors want to offer the evidence in a hearing before the three men and a fourth defendant, Patrick Kiley, are sentenced Jan. 3.

Doug Altman, Beckman's attorney, learned this week about the December 2009 murder plot, which was buried at the end of the government's presentencing document for Durand. During a meeting at a Perkins restaurant, Pettengill said he was stunned by Durand's proposal to "take out" Beckman and believed he was joking.

"Obviously I reported this to my client," Altman said. "I will be interested to see what develops at the hearing."

Judge Michael Davis may decide against allowing the allegations to be heard in court, something that Durand's attorney, Brian Toder, urged in a motion Thursday: "Given the untrustworthiness of Mr. Pettengill's potential, self-serving testimony, coupled with his natural disposition towards prevarication, the court should ... declare the allegations involving the imagined murder plot to be excluded from the court's consideration," Toder wrote.

Pettengill has pleaded guilty and has testified for the government in hopes of a reduced sentence.

The U.S. attorney's office had no comment.

Beckman, a self-described investment star, was convicted in June on 15 fraud and money-laundering charges related to a $194 million Ponzi scheme run by business associate Trevor Cook. The bogus currency-investment scheme bilked more than 700 investors nationwide, mostly retirees.

In addition, Beckman, a former Anoka High School hockey standout, also was convicted of two counts related to his attempt to defraud the National Hockey League in a failed bid to buy a $5 million piece of the Minnesota Wild, of defrauding an elderly Spring Lake Park couple out of nearly $4 million in life insurance proceeds and of three tax charges.

Durand and Kiley, who prepared radio broadcasts used to solicit clients, potentially face life sentences. Beckman, a brash 42-year-old former money manager, offered a $19 million check earlier this month to avoid what could be life in prison. The proposal was rejected.

Cook pleaded guilty and received a 25-year sentence.

How players came together

Jurors heard testimony from 90 witnesses and scrutinized 806 exhibits introduced into evidence during the nearly two-month trial. Altman, Beckman's attorney, told the jury that the real villain in the case was not his client and not even Cook, but Pettengill, "the stool pigeon, the fink, the rat."

Toder, Durand's attorney, previously acknowledged that his client played a minor role after Cook fired him. But he did so because he believed that he still had an ownership interest in Oxford Global Advisors, which was used to facilitate the fraud. Toder said the money Cook paid Durand was a severance.

Kiley was unlike Durand and Beckman, the other pitchmen, said Assistant U.S. Attorney Tracy Perzel. He lived a frugal life in a large Burnsville home provided by Cook, where he prepared the radio solicitations, she said. "He had a silver tongue," Perzel said, and brought in far more money than anyone else.

Beckman signed on with Plymouth money manager Pettengill in 2004, when they formed CMI Capital Management. But that soon fell apart, and Pettengill joined Cook and longtime business associate Durand at Universal Brokerage Services, which pitched currency investments out of a home Cook owned in Burnsville.

Cook's Ponzi scheme is second only to the $3.65 billion fraud of Twin Cities businessman Tom Petters, who's serving 50 years in federal prison. Unlike Petters, who ransacked hedge funds, Cook and his cronies pinched the nest eggs of ordinary people.

'Desperate measures'

In this week's presentence document, Perzel and fellow Assistant U.S. Attorney David MacLaughlin described Durand as smart, persistent and confident when he shared his solution with Pettengill for their growing financial problems: Kill Beckman.

"In Mr. Durand's mind, desperate times call for desperate measures, and there are no boundaries -- legal, moral or otherwise -- that limit the actions he would be willing take to benefit himself," they wrote of what they called his narcissistic thinking.

Toder challenged Pettengill's credibility, saying that he lied to the victims, while under oath to federal investigators and to his former counsel, and he questioned why Pettengill never mentioned the scheme during at least eight meetings with the IRS and the FBI.

"Instead, the government, at the eleventh hour, has its snitch cry blood murder," he wrote.

If Davis grants the hearing on the murder plot, the lawyer said, Durand will testify that he never had a conversation with Pettengill about it.

Staff writer Dan Browning contributed to this report. David Chanen • 612-673-4465

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