Any of you here of this enormous ponzi scheme. This guy, Tom Petters owns 60+ businesses under Petters Group Worldwide, think Polaroid and a Airline in Minnesota. Anyway, one of his businesses was a specialty finance arrangement, where he would raise money from Institutions and HNW accredited investors, take that money supposedly buy OLD high end inventory from the Best Buys and Circuit Cities at a discount, then sell it to Costco, Sams Club, etc, at a premium from his purchase price. Anyhow this firm has been around for I beleive 10+ years doing this, had some huge hedge funds and institutions with vast due dilligence experience dig deep into it, and found that it was a legitamit investment. It wasnt, he was never buying anything from Bestbuy, etc, and was never selling anything to Sams Club, etc. He generated fake invoices, established fake warehouses, and defrauded investors out of what some estimate could be $1-2 BILLION. Anyone elses job hurt by this?
$100 million or thereabouts it seems, not billions http://au.ibtimes.com/articles/20080926/warrant-alleges-fraud-by-ceo-of-petters-group.htm Warrant alleges fraud by CEO of Petters Group By AMY FORLITI Posted 27 September 2008 @ 11:10 am AEST The chairman and CEO of Petters Group Worldwide and several associates allegedly schemed to defraud investors of $100 million or more since the 1990s, according to a search warrant unsealed Friday in U.S. District Court. The search warrant, executed Wednesday at the company’s Minnetonka headquarters, contains an affidavit alleging that Tom Petters, some employees of Petters Co. Inc. and associates created fictitious documents for current and potential investors. The affidavit said the scheme tricked more than 20 investors and investment groups that had provided more than $100 million, and perhaps “substantially more.” It said a person associated with Petters and PCI had approached authorities with documents and evidence of fraud. Jon Hopeman, an attorney for Petters, said he would not comment in detail until he read the search warrant, which was unsealed shortly before the courts closed. “Mr. Petters denies that he did anything wrong and intends to fight,” Hopeman said. Petters did not return phone messages left at his homes in Minnesota and Colorado. According to the affidavit, Petters lured potential investors by telling them funds would be secured by certain transactions that were actually fictitious. Investors were given false documents that PCI was purchasing merchandise from vendors such as Nationwide International Resource, based in Los Angeles, and Enchanted Family Buying Co., based in Excelsior, Minn. Additional purchase orders falsely said that PCI sold the same merchandise to stores such as BJ’s Wholesale Club and Sam’s Club. Petters Group Worldwide comprises several companies, including Sun Country Airlines, Fingerhut and Polaroid. Company spokeswoman Federal officials executed search warrants for nine properties and two vehicles.
A finance professor at the business school I’m trying to get into testified against him as a expert witness (or something of that nature) explaining the charges he was assessed with in a separate case. She said he was the slimiest SOB she had ever met. This recent charge is no surprise to her.
I’ve know that Gottex funds of Boston had invested some money in PE firm (somewhere in Florida) and that PE had some exposure to Petters.
I was notified a week or two/three ago, we’ve got some exposure through hedge funds in this a$$hole. Trust me, $100 mn doesn’t cut it on a global scale. Lots and lots of people had exposure on this SOB. Back to our operational due diligence team… someone should’ve noticed this.
cfaboston28 Wrote: ------------------------------------------------------- > I’ve know that Gottex funds of Boston had invested > some money in PE firm (somewhere in Florida) and > that PE had some exposure to Petters. Not one. Three.