Investors who were victimized by Tom Petters’ Ponzi scheme will get additional payouts drawn from more than $22 million in forfeited funds, the U.S. Department of Justice announced Wednesday.
Petters’ elaborate multibillion-dollar scheme, the largest in Minnesota history, pretended to take investors’ money to buy retail inventory, but instead used the money to pay off earlier investors and his friends and for a lavish lifestyle. The scheme unwound in 2008, when a Petters business associate told federal authorities that the business was largely a sham. In late 2008, Minnetonka-based Petters Co. filed for bankruptcy.
Petters, now 63, formerly of Wayzata, was indicted on Dec. 1 of that year on counts of mail fraud, wire fraud, money laundering and conspiracy.
On Dec. 2, 2009, a federal jury found him guilty of all 20 counts. U.S. District Judge Richard Kyle sentenced him to 50 years in federal prison.
Petters and fellow convicted defendants were ordered to forfeit assets obtained through their criminal activity, including real estate, bank and investment accounts and vehicles. The Justice Department distributes the proceeds of forfeited assets to investors who have lost money to such fraud.
In 2018, an initial distribution of more than $16 million was made, U.S. Attorney Erica MacDonald said in a news release. The total distribution is now more than $38 million.