The 2009 conviction of Tom Petters was upheld Friday by the Eighth U.S. Circuit Court of Appeals, which ruled that the former Wayzata businessman was given ample leeway to present his defense and that pretrial publicity was not sufficient to warrant a change of venue.

A three-judge panel also ruled that jury instructions were appropriate and that Petters' 50-year prison sentence for his role in the infamous $3.65 billion Ponzi scheme was within the discretion of U.S. District Judge Richard Kyle.

Petters' attorney Jon Hopeman said the Eighth Circuit ruling will be appealed to the U.S. Supreme Court.

"I know Mr. Petters well, and I can tell you he will never quit trying to vindicate himself and secure his release," Hopeman said.

The heart of Petters' appeal centers on the background of one of his co-defendants, Larry Reynolds, who ran part of the money-laundering aspects of the fraud.

Reynolds had an extensive criminal background and once was in the government's witness protection program. Petters' attorneys wanted to use that information to demonstrate that Reynolds "corrupted" Petters Cos. Inc. (PCI), the business unit that ran the Ponzi scheme. But Reynolds' file from the witness protection program was ruled inadmissible.

Petters "contends his right to a public trial and his right to put on a complete defense were violated" when that evidence could not be admitted, Hopeman said.

But the Eighth Circuit disagreed.

The three-judge panel said Reynolds' prior offenses were "collateral" to the crimes in the Petters fraud and might have confused the jury. "Further, defense counsel was able to vigorously attack Reynolds credibility in the cross examination," the judges said.

The appeals court also dismissed Petters' assertion that jury instructions did not make enough allowance to support his position that his associates were conducting the fraud unbeknownst to Petters.

In its 16-page opinion, the three-judge panel said there were insufficient grounds for a change of venue, Petters' defense team had requested, citing extensive pretrial publicity.

Criminal law expert Ted Sampsell Jones said the likelihood of a successful appeal at the Supreme Court level is thin.

"The Supreme Court only takes 60 to 70 cases a year, and they generally focus on new questions of law," said Sampsell Jones, a professor at William Mitchell College of Law. "The odds of getting that granted are extraordinarily low."

Petters was convicted on 20 counts of fraud, conspiracy and money laundering and is serving his sentence at the Leavenworth federal prison in Kansas.

Friday's ruling can be read at

David Phelps • 612-673-7269