A retired widow testified Thursday that she's on the verge of losing her Edina home because she trusted Tom Petters.

Janet Leck, 79, said she and her late husband met another Petters investor, Frank Vennes Jr., in the mid-1980s when they helped arrange religious retreats in prisons through a nonprofit entity called Charis Ministries. Vennes was in the Sandstone Federal Correctional Institution on money-laundering, drug and firearm charges at the time.

Vennes became an evangelist in prison and after he got out, steered unwitting investors to the Wayzata businessman. On his advice, investors, including faith-based organizations, put $1.2 billion into the hands of Petters and the company he controlled, Petters Co. Inc. For his work, Vennes, 52, allegedly collected commissions totaling $28 million, according to government documents.

Leck said her first investment with Petters did all right. She understood the merchandise was for Petters Warehouse Direct outlets, and she felt reassured by seeing merchandise in one of the stores in her neighborhood. She didn't know how much her investment paid, she said, because her husband handled it.

Leck said Vennes told her and her husband in 2004 that he was dissolving his partnership with Petters and returning their money. "He didn't like some of the things he was seeing in Mr. Petters' personal life," she said without elaborating.

About two years later, Vennes said he was working with Petters again and asked her to invest, she said.

Leck said she had met Petters once at a social gathering at Vennes' house and had heard him speak at a Teen Challenge banquet, an organization that serves teens and adults who have hard-core addictions, which gave her confidence in him.

She re-mortgaged her home and drew out $190,000 in equity to invest with Petters, she said. Leck said she relied on the $3,400 monthly payments from that loan for living expenses until September 2008, when authorities raided Petters' home and business looking for evidence that he was running an alleged $3.5 billion Ponzi scheme.

Now, unless she can restructure her mortgage, Leck said, "I'm looking at foreclosure. ... I will move from my home of 30 years."

Although a court-appointed receiver has been liquidating Vennes' personal and business assets, he has not been charged with a crime in connection with the alleged scheme and is not scheduled to testify in the case.

Leck wasn't the only one on the witness stand Thursday.

Former Excelsior business owner Michael Catain told the jury how he managed part of the finances in the Petters operation and periodically slipped envelopes filled with cash to Petters -- reaping a fat commission for himself.

Catain said the cash was euphemistically called "cabbage," and that Petters' personal assistants would call from time to time and ask, "Is there anything coming from the garden?"

Catain said he gave Petters bundles ranging from a few thousand dollars to nearly $20,000.

The government's case against Petters is premised on the allegation that he misled investors and used their funds in ways not intended.

In one e-mail to Petters, Catain says, "It rained last night and 18 head of cabbage grew. I can bring it to the game or tomorrow at Sunsets." He said the 18 heads of cabbage referred to $18,000. Sunsets is a Wayzata restaurant.

Under cross-examination by Petters attorney John Hopeman, Catain acknowledged that Petters did not request the money and that Catain did not know if, or how, it was spent.

Catain, a codefendant who pleaded guilty to money laundering conspiracy, testified that Petters asked him to set up Enchanted Family Buying Co. in 2002 to act as a go-between with investors who wanted to check on the inventory he was supposed to be buying with their money.

Catain said his firm would get wires ranging from $2.5 million to $50 million on a daily basis that Petters was supposedly using to buy merchandise for resale through large retailers.

Catain didn't disagree when Assistant U.S. Attorney Timothy Rank showed Catain a figure of $12 billion that went through Enchanted Family's account from 2002-2008.

"It was a sham," Rank said.

"Yes, it was," Catain responded.

Rank said records indicate that Catain made $10 million in commissions on those deals.

Earlier, jurors heard from New York investment banker Michael Liss, who described Petters as a "swashbuckling industrialist" who had an arsenal of "ridiculous" excuses for not paying his debts on time.

Prosecutors expect to wrap up their case early next week. Hopeman said the defense would call about 10 witnesses. He said it has not yet been determined if Petters will testify.

David Phelps • 612-673-7269