Federal prosecutors asked the Eighth U.S. Circuit Court of Appeals Tuesday to deny the appeal of former Wayzata businessman Tom Petters, who seeks to overturn his conviction and 50-year prison sentence for engineering a $3.65 billion Ponzi scheme that spanned parts of two decades.

"The evidence against him was overwhelming," wrote Assistant U.S. Attorney Joe Dixon in an 85-page brief seeking to refute Petters' claims that he was the victim of adverse pretrial publicity and a dishonest witness. "The defense was as brash and unsubstantiated as the Ponzi scheme itself."

The government said the jury pool used in the Petters case was larger than most criminal cases and included a pre-selection questionnaire about that case that resulted in only four dismissals during jury selection.

"Indeed, the record demonstrated that the defendant actively promoted media coverage of the case," Dixon wrote, citing stories defending Petters by his attorneys and his girlfriend.

Petters was convicted last December on all 20 counts of fraud and money laundering for masterminding an enterprise that promised to buy and sell electronic goods but instead took investor funds to pay off other investors and finance the Petters corporate family, which once included Sun Country Airlines and Polaroid.

Petters is serving his sentence at the federal penitentiary in Leavenworth, Kan.

'Snowflake in the avalanche'

In his appeal, Petters claimed he could not mount an adequate defense in part because of limitations on his attorneys' cross examination of Larry Reynolds, a partner in the scheme who once was in the federal witness protection program for past crimes and assistance to the government.

But the government said Petters' lawyers had more than ample opportunity to question Reynolds and attempt to discredit him.

"Reynolds' testimony was merely one snowflake in the avalanche of evidence against defendant Petters," Dixon said.

Prosecutors also rejected Petters' argument that he relied on the advice and oversight of attorneys for his business decisions and that he was too distracted with other business issues to be aware of the Ponzi scheme that he says was run by his associates.

The government said that using such a defense strategy meant "there was a 15-year conspiracy to enrich Tom Petters with hundreds of millions of dollars without Tom Petters knowing."

As for Petters' sentence, U.S. District Judge Richard Kyle was fully justified in imposing a 50-year term, the government said.

"The defendant initiated and led the fraud, was its principal beneficiary, obstructed justice and refused to accept responsibility and was, to the end, unrepentant," the government brief said. "As noted by the district court, Petters will remain a threat to the community."

The next step in the appeal process would be oral arguments before a panel of appeals court judges. Dixon said he would need 15 minutes to argue the government's side.

David Phelps • 612-673-7269