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The Tom Petters saga

  • November 14, 2012 - 8:50 PM

 

What's new: Petters bankruptcy trustee Doug Kelley sues BMO Harris Bank, accusing it of "aiding and abetting'' the $3.65 billion Ponzi scheme.

The bank: Chicago-based BMO Harris Bank, owned by Canada's Bank of Montreal, inherited the Petters issue when it bought Wisconsin's M&I Bank last year. From 2003 through 2008, Petters Company Inc. had a key bank account at M&I Bank through which $35 billion flowed in the Ponzi scheme, according to the suit.

The swindle: Wayzata businessman Petters and cohorts operated a Ponzi scheme from 1993 to 2008; the business claimed to be buying consumer electronics and other goods from wholesalers and reselling to big-box retailers. In reality, it was faking orders and taking money from new investors to pay off earlier investors. The swindle fell apart in 2008.

So far: Petters is serving a 50-year sentence in Leavenworth. Kelley and a team of attorneys continue trying to recover money for victims. So far about $300 million has been collected.

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