Minnesota businessman Thomas Petters has failed to persuade a federal judge to reduce his 50-year prison term for running a $3.65 billion Ponzi scheme.
Petters, 56, claimed his trial lawyers had been ineffective because they didn't tell him about a plea offer from federal prosecutors, a year before his December 2009 conviction, that would have sent him to prison for no more than 30 years.
In a sharply worded decision late Thursday, U.S. District Judge Richard Kyle said the sentence was appropriate, and that Petters' lawyers provided capable counsel, including by notifying their client about the proposed 30-year cap.
"Staring into an abyss of nearly 15,000 days of incarceration, Petters has tried to pull off one final con," the St. Paul, Minnesota-based judge wrote. "He is entitled to neither relief nor sympathy from this court."
The government had charged Petters with using one of his companies to bilk investors who thought he was using their money to buy consumer electronics for resale to retailers such as Costco Wholesale Corp and BJ's Wholesale Club.
Jurors convicted Petters on all 20 criminal counts that he faced, including wire fraud, mail fraud and money laundering. More than a dozen people tied to the scheme went to prison.
"Tom Petters will say and do just about anything if he perceives he gets an advantage," Acting U.S. Attorney John Marti, who helped prosecute Petters from the start of the criminal case, said in a phone interview. "Sadly, we have individuals like Mr. Petters who through fraud and deceit take advantage of the good faith of the American public."
At an October 23 hearing, Petters testified that he did not know before trial about the plea offer, a contention that his trial lawyers rejected.
Kyle was unmoved by what he called Petters' "deliberate, measured, and calculated" testimony, including "crocodile tears" and even an admission of guilt, that reflected a man "willing to say or do anything" to gain leniency.
Steven Meshbesher, a lawyer who argued Petters' motion for a lesser sentence, in a phone interview said it is unclear whether there will be an appeal, and that he had discussed the decision with Petters' family.
"They are very saddened and upset with the decision," Meshbesher said. "They feel that the judge's interpretation of the testimony was not accurate, and rightfully so."
Meshbesher said he has yet to discuss the decision with Petters, who is housed in a Leavenworth, Kansas prison.
"When I saw him in October, he was disheveled and overweight and was wearing hearing aids, which is unusual for someone in his mid-50s," he said. "He does not look like the Tom Petters of old. He looked sad, depressed and unhealthy."
A Ponzi scheme occurs when money from new investors is used to pay earlier investors.
The case is U.S. v. Petters, U.S. District Court, District of Minnesota, No. 08-00364.
(Reporting by Jonathan Stempel in New York; editing by Andrew Hay and Nick Zieminski)