File illustration of Tom Petters, former billionaire convicted in Minnesota's largest business fraud, on the stand in a federal court in St. Paul in October 2013 when he asked for a lighter sentence.

Eddie Thomas, Star Tribune

Tom Petters tries once again for a shorter prison sentence

  • Article by: David Phelps
  • Star Tribune
  • January 8, 2014 - 5:58 AM

Tom Petters is taking one more swing for the fences.

With the help of a so-called “jailhouse lawyer” also in Leavenworth federal penitentiary, Petters has filed motions to restore his attempt for a reduced sentence and to remove the judge who denied it in the first place.

In his latest filings in U.S. District Court in St. Paul, Petters contends that his original defense attorneys failed to provide him with a formal plea offer by federal prosecutors. The prosecutors had made an informal verbal offer that would have given Petters a 30-year maximum prison sentence for his role in a $3.65 billion Ponzi scheme that collapsed more than five years ago.

In the newest filing, Petters’ legal representative says, “Petters’ [defense] attorney failed to put the plea agreement in writing or on the record.”

Petters, who is serving a 50-year prison sentence for his 20-count conviction, lost an appeal on similar grounds last month when U.S. District Judge Richard Kyle said Petters was attempting to pull off “one final con” with his claim of “ineffective assistance of counsel.”

Kyle said Petters received “constitutionally effective counsel” and a lawful sentence. The judge determined that Petters was well aware of the informal plea offer but that there was no evidence that he was willing to accept it because of his unwillingness to admit guilt.

That ruling is not appealable, which creates some confusion over the prospects of the latest motions.

“The legal system depends in some part on the notion that once you’ve lost it’s over, but you can’t stop someone from sending things to the courthouse,” said Ted Samsell-Jones, a criminal law professor at William Mitchell College of Law. “Once in a while, people are successful, but 99.9 percent of the time, it’s frivolous.”

Petters was assisted by John Lambros in his legal filings. Lambros, a convicted Minnesota drug dealer, is also an inmate at the Leavenworth. A “jailhouse lawyer” is an inmate with some knowledge of the law who offers legal assistance to other inmates.

The motion also contends that Petters was not given the option of pleading “nolo contendere” to the charges against him where he would neither admit nor deny quilt. Such a plea would have allowed him to still be eligible for a plea bargain, the Petters motion asserts.

A second Petters motion calls for the recusal of Kyle from further consideration of the latest issues before the court because of a question of “impartiality.”

The motion says Kyle had a conflict in overseeing the Petters case because Kyle’s son is an attorney at the law firm Fredrikson & Byron, which also represented Petters on business matters before he was indicted on criminal charges. There is no indication, however, that Petters was ever a client of Richard Kyle Jr.

The motion also challenges the validity of the final version of the indictment that was used to convict Petters.

Petters’ previous attorney on the plea bargain appeal, Steve Meshbesher, said the most recent motions were written without his involvement.

“My representation is over,” Meshbesher said Tuesday. “I did what I told him I was going to do. Judge Kyle made his ruling, and it is not appealable.”

Kyle declined to comment Tuesday.

Petters was convicted in 2009 on charges of fraud, money laundering and conspiracy for his role in a decade­long Ponzi scheme that involved the fictitious sale of consumer electronic goods to a big-box retailer with funds raised from investors. Instead, the funds of new investors were used to pay off old investors while the money that Petters and associates raised was used for other purposes.


David Phelps • 612-673-7269

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