Ted Mondale, the executive director of the Minnesota Sports Facilities Authority and heir to a prominent Minnesota family, has agreed to pay $50,000 to the receiver for convicted Wayzata businessman Tom Petters to cover an unpaid personal loan of $150,000 provided by Petters in 2005.
According to court documents, a motion by receiver Doug Kelley to accept that payment will be heard by U.S. District Judge Ann Montgomery Tuesday morning.
Mondale, the son of former Vice President Walter Mondale, did not respond to requests for comment.
The $50,000 payment was negotiated between Kelley’s office and Mondale and included a review of Mondale’s financial situation by former federal agents working for Kelley.
“He [Mondale] submitted a financial statement. My former FBI and IRS agents dissected it and we are convinced this is the most Mr. Mondale can pay,” Kelley said in an interview Monday.
The settlement with Mondale is one of several that Kelley has negotiated with former Petters business associates; the recovered funds go into a pool for eventual payment to victims of Petters’ $3.65 billion Ponzi scheme, which collapsed in 2008. The settlements are part of a so-called “clawback” process in which Kelley attempts to recover transactions made by Petters using ill-gotten proceeds.
Kelley’s clawback efforts have ranged from nonprofits including St. John’s University to lenders BMO Harris Bank and General Electric Capital Corp. to former Petters executives. Several clawback requests have resulted in lawsuits that remain unsettled, including those involving early investors who made money during the Ponzi scheme’s heyday.
In addition to Mondale, Kelley will also ask the judge Tuesday to approve settlements of $16,400 from Richard Wolbert, a former Petters business associate from Milaca who received $600,000 in 2005 from Petters, and Stephen Ratliff, a former executive with Polaroid, a firm Petters owned. Ratliff and his insurer will pay $108,400 from a total of $565,000 transferred to his Twin Cities company, Integrity Marketing & Sales, between 2002 and 2008.
Mondale, 55, has spent much of his adult life in the public spotlight. After two terms in the Minnesota Senate, he was appointed chairman of the Metropolitan Council in 1999. In his current position, he is responsible for overseeing the construction of a new stadium for the Minnesota Vikings.
Mondale joined the Petters operation as a senior vice president in 1999 to look for Asian manufacturers of consumer electronic goods. Petters testified at his own trial that the Mondale name “opened up incredible doors” in Asia, where Walter Mondale once served as U.S. ambassador to Japan.
Mondale held a series of positions with Petters until he resigned in 2003 to run Nazca, a start-up software company that developed programs to trace land records more easily. One of Mondale’s early investors was Petters, who invested $750,000 in the company.
Petters made the $150,000 personal loan to Mondale in 2005 instead of increasing his stake in Nazca directly, according to Kelley. The loan carried a 10 percent interest rate and was due in December of 2006, one year after it was made. The loan was not repaid; the software company was sold in 2010 for an undisclosed amount.
Petters is serving a 50-year sentence in the Leavenworth federal prison for his role in masterminding the decade-long fraud that persuaded investors that their funds were being used to purchase consumer electronic goods for sale to big-box retailers when the new investments actually were used to pay off earlier investors and finance Petters’ other business interests.