[3][6] In January 2005, Petters Group Worldwide purchased the Polaroid brand for $426 million, with plans to use it on consumer electronics and new technologies.
Documents released by the FBI, IRS, and other federal agencies noted that they were seeking evidence of a scheme to lure investors into funding a company based on tens of millions of dollars in purchases and sales that never occurred.
[9][10][11][12][13] The U.S. Attorney staff noted that the government knew nothing about the scheme until Deanna Coleman, vice president of operations for Petters Co., approached them to confess and offered to help federal authorities investigate.
This led to the prosecution of Robert Dean White, who admitted to being involved in creating false bank statements and other documents that were used to trick investors in what he described as a massive Ponzi scheme.
The phony records were used to show that Petters Co. was buying merchandise, generally electronic goods, from two suppliers (who were named as co-defendants).
[8] In addition, Frank E. Vennes Jr., the CEO and sole shareholder of Metro Gem, under a plea agreement, was sentenced to 180 months in prison for aiding and abetting misrepresentations and omissions to investors related to the PCI notes.
[15][16] Metro Gem held 38 outstanding PCI notes with a total principal (face value) of $130.3 million[17] The FBI Criminal Complaint identifies First Regional Bank, Los Angeles (Century City), California as the bank that moved more than 11 billion dollars through an account for Nationwide International Resources Inc. of Los Angeles.
In a separate legal filing in February 2008,[18] more than seven months before the Petters allegations surfaced, the Federal Deposit Insurance Corporation (FDIC) issued a cease and desist order citing First Regional Bank for failing to comply with regulations regarding money laundering with respect to Individual Retirement Accounts and violating rules regarding reporting suspicious activity.
[18] On December 2, 2009, Tom Petters was found guilty in the U.S. District Court in St. Paul, Minnesota on 20 counts of conspiracy, wire and mail fraud.
[19] Petters' associate and primary fundraiser, Frank Vennes, has been charged with numerous counts of fraud and was sentenced to 15 years in prison.
[21][22] After more than three years of refusing to speak with the media, Petters spoke with Twin Cities Business magazine Editor in Chief Dale Kurschner, who spent several hours inside Leavenworth prison interviewing him.
In light of the criminal prosecution, St. John's Abbey arranged to return the $2 million gift to the court-appointed receiver for the Petters bankruptcy.
The college student inadvertently wandered onto private property where the owner, Alfio Raugei, mistook him for an intruder and stabbed him to death.
[25] He later promised an additional $4 million, with the total to support two professorships and the John T. Petters Center for Leadership, Ethics and Skills Development within the Farmer School of Business.
[27] Petters also donated $12 million to Rollins College in Winter Park, Florida, where he was a member of the Board of Trustees, to create two new faculty chairs in International Business.