Armed with maps, charts and a new international legal team, the bankruptcy estate of felon Tom Petters is prepared to mount an overseas offensive to collect any assets that can be linked to Petters’ $3.65 billion Ponzi scheme.

The Petters operation has potential targets in 26 countries, with the largest number in Europe, the Caribbean and Hong Kong.

More than $100 million is at stake, according to Petters’ bankruptcy trustee Doug Kelley.

But the international offensive carries risks, too. It could prove prohibitively expensive as attorneys who specialize in asset recovery attempt to trace funds that were paid to investors more than five years ago. The Petters scheme, which was busted by federal authorities in 2008, is believed to have operated for a decade before that.

“Doug Kelley is well respected, but the problem is how much money is going to be spent on this,” said Richard Painter, a University of Minnesota Law School professor of corporate law. “That’s creditors’ money.”

Kelley is well aware that attorney’s fees are an issue in a bankruptcy liquidation plan for Petters Group Worldwide and Petters Co. Inc. So far the estate has recovered about $110 million, net of professional fees, to eventually be distributed as pennies on the dollar to creditors of the Petters corporate estate and victims of the failed Ponzi scheme. Separately, about $300 million has been recovered in related bankruptcy and receivership cases, for a total of $410 million.

“We’re doing a cost-benefit analysis even as we speak,” Kelley said in an interview last week. “We have to determine the chances of success and the chances of collection.” The greater the likelihood of recovery will guide how aggressively each claim will be pursued, Kelley said.

The committee of unsecured creditors in the Petters corporate bankruptcy so far is on board with Kelley’s action.

“The committee is working with the trustee to aggressively pursue these claims, while being mindful of the legal costs,” said committee attorney David Runck of the Eden Prairie firm Fafinski Mark & Johnson. “Hundreds of millions of dollars were fraudulently sent to offshore funds.”

Kelley so far has retained law firms in Ireland, Germany, Switzerland, the Netherlands, Luxembourg, Bermuda, British Virgin Islands and the Cayman Islands. Rates paid to the firms are hourly billings that range from $450 to $600 for senior partners.

Kelley also has an arrangement with a Miami-based investigative firm called Gaffney, Gallagher and Philip that is staffed by former FBI agents who specialize in tracing assets through Caribbean countries.

Expertise in Caribbean banking channels is considered crucial because the current investigation by Kelley and his team is focused on two large hedge funds with offshore connections in that region: Epsilon Investment Management and Arrowhead Capital Management. Arrowhead’s Mound-based operator, James Fry, is serving a 17½-year sentence on charges of fraud and making false statements.

The Epsilon group of funds and its Florida-based founder, Steve Stevanovich, are the targets of a $323 million lawsuit brought on behalf of the Petters estate to recover, or claw back, allegedly false profits that the funds collected beyond their initial investment with Petters.

The Arrowhead and Epsilon funds were among hundreds of funds and individuals who invested with Petters for up to a decade and earned sometimes fat returns for financing the purported purchase and resale of consumer electronic goods to big-box retailers like Sam’s Club. But no goods existed and funds from new investors were used to provided promised returns to older investors.

Petters is serving a 50-year sentence at the federal prison in Leavenworth, Kan., for his role in the scheme. Ten others also did or are doing prison time for their roles in the operation, which was the biggest financial fraud in Minnesota history.

Lists of investors

With the help of favorable bankruptcy court rulings on discovery issues and auditing specialist Pricewaterhouse­Coopers, the legal team for the Petters estate recently obtained access to lists of investors in the international operation of the two hedge funds and now is attempting to determine who invested what and who received what in return.

“For the first time we’re going to be able to see beyond the feeder funds [that invested with Petters] and see who invested in them,” Kelley said.

But with a list of countries that ranges from Bahrain to Monaco to Japan, the legal landscape on which the Petters attorneys will tread will be daunting.

“It’s going to be hard,” said Painter. “Even in the U.S. the law on clawbacks is not very clear. Each jurisdiction is going to be different and have its own additional hurdles.”

The Madoff model

But there is some precedent for this kind of action.

The trustee in the liquidation of the Bernard Madoff corporate estate, Irving Picard, has scored a couple of settlements with international investors in that $65 billion Ponzi scheme, which fell apart in late 2008, a few months after the Petters scheme exploded in the headlines.

Picard’s biggest recovery, $470 million from Union Bancaire Privee, was the result of a settlement that precluded a clawback lawsuit against the Swiss bank.

Kelley said he and his legal team must determine whether to file a legal action against an investor where he or she lives or where their financial assets are located. There’s also the issue of whether actions taken in U.S. Bankruptcy Court are enforceable in a foreign jurisdiction or which cases need to be initiated in the country of the investor to be valid.

“There’s no cookie-cutter approach to this one,” Kelley said. “Each country has to be tailored on how to proceed.”