Petters jailed in $1 billion fraud case

Oct. 4, 2008 at 8:19 PM
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MINNEAPOLIS, Oct. 4 (UPI) -- Minnesota businessman Tom Petters, considered a flight risk, is jailed this weekend on charges he defrauded investors of $1 billion or more, authorities say.

Federal agents arrested Petters Friday, in part because of taped conversations indicating he intended to flee the United States, the Minneapolis Star Tribune reported Saturday. He was being held without bail, charged with mail and wire fraud, money laundering and obstruction of justice, pending another hearing Tuesday in federal court in Minneapolis, the newspaper said.

Assistant U.S. Attorney John Marti requested Petters be kept in custody until trial. Marti submitted court papers alleging the businessman was "a serious risk" to flee.

Petters' home and company headquarters in Minnetonka were searched Sept. 24 by federal investigators looking into allegations he swindled more than 20 investors and investment groups out of "well in excess of $1 billion, and possibly substantially more."

His business holdings include Polaroid, Sun Country Airlines and Fingerhut.

"Mr. Petters maintains his innocence and he intends to fight to get out of custody on Tuesday," his attorney, Jon Hopeman, told the Star Tribune Friday night.

Two of Petters' business associates -- Michael Catain, 52, of Shorewood, Minn., and Larry Reynolds, 65, of Las Vegas -- also are charged in the case.

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