Indicted Wayzata businessman Tom Petters is asking for the third time to be released from federal custody to participate more fully in the preparation for his June trial on charges that he masterminded a $3.5 billion Ponzi fraud scheme.

In a motion filed Monday before U.S. District Court Judge Richard Kyle, attorneys for Petters argue that no evidence exists indicating that he may be a risk to flee the country and that he and his family will pledge substantial personal assets to guarantee his appearance at trial.

Petters has been held in the Sherburne County Jail since early October. Both a federal magistrate judge and a district court judge subsequently ruled that Petters should remain in custody because of evidence that he might leave the country to avoid a trial.

In their motion this week, Petters' attorneys Jon Hopeman and Paul Engh contend that Petters' confinement restricts his ability to review potential evidence in the case. Under arrangements by the government, Petters has been coming to the U.S. Attorney's office in Minneapolis to work with his attorneys.

"The trust level in that setting is de minimus," the attorneys say. "The room itself has a camera, evincing paranoia and hostility."

Visits to the Sherburne facility are equally awkward, the attorneys write, likening it to a "fish tank."

"We invite the court to carry the 160 boxes of materials that must be reviewed, to visually see how many can be squeezed into the cement cubicle, and placed on the Formica-topped table as the pages are flipped over one at a time," the motion says.

In late October, Chief U.S. District Judge Chief Michael Davis said the U.S. Marshal should consider holding Petters in Hennepin or Ramsey County facilities to make it easier for him to meet with his attorneys. "This has not occurred," his attorneys said without elaboration.

"Considerations of flight caused Mr. Petters to be detained, the government insisted he had hidden bank accounts. But that reason, we now know, is vacuous," they wrote. "Three months later no such evidence has been found. Rather, every indication is that the entirety of Mr. Petters assets are now under the control of a receiver, and that there are no assets out of the country. Further, Mr. Petters, of course, has provided substantial assistance to the receiver in locating and preserving assets."

The U.S. Attorney's office has not yet responded to Petters' latest motion to be released pending trial.

David Phelps • 612-673-7269