Accused Ponzi schemer Petters downplays daily role
ST. PAUL, Minnesota (Reuters) - Tom Petters, on trial as the alleged mastermind of a $3.65 billion Ponzi scheme, took the witness stand in his own defense on Wednesday, trying to portray himself as a "big picture" executive far removed from the supposed fraud that prosecutors say he committed.
Petters' now-bankrupt empire, Petters Group Worldwide, once included companies such as Polaroid and Sun Country Airlines.
It crashed a year ago in a 20-count federal indictment accusing Petters of fraud, money laundering and other charges.
Answering to defense questioning, Petters tried to show that he was not involved in day-to-day goings-on at his company, reserving those responsibilities for subordinates.
Asked by defense lawyer Jon Hopeman to recall the day his company acquired the instant-print camera maker Polaroid Corp, Petters recalled spending two hours signing some 300 documents.
"Did you read any of them?" Hopeman asked.
"Not thoroughly, no. I pay people to do that," Petters said.
His lawyer also worked to portray Petters as a philanthropist and aggrieved father. The businessman's son was killed in Italy in 2004.
Petters is hoping to convince a federal jury in St. Paul, Minnesota, that he himself is innocent of a Ponzi scheme, which occurs when money from new investors is used to repay earlier investors.
The U.S. government has said Petters concocted fake checks and purchase orders as part of a scheme to deceive retailers into believing that he was transacting more business with them than he actually was.
Prosecutors have accused Petters of promising investors big returns through financing his company's purchase and sale of electronics goods to retailers such as Costco Wholesale Corp and BJ's Wholesale Club Inc.
At trial, which began three weeks ago, defense lawyers have tried to shift blame in particular toward Deanna Coleman, a former associate and whistle-blower. She previously testified under cross-examination that she wrote more than $1.2 million in Petters company checks to her boyfriend and brother.
Petters said he busied himself meeting with clients and raising funds, while he entrusted Coleman with his checkbook.
"She would organize everything," Petters said of Coleman. "I'm not the epitome of organization. If Deanna did it, you didn't need to worry about it."
On the stand on Wednesday, Petters broke down several times when discussing the fatal 2004 stabbing of his son, who had been studying in Italy.
Asked whether the murder had distracted him from his business, Petters said: "I tried to stay in the game, but it was hard."
The case is USA v. Petters et al, U.S. District Court, District of Minnesota, No. 08-00364.
Separately on Wednesday, Ritchie Capital Management LLC said it filed a lawsuit against two former company officers affiliated with Petters Group Worldwide, alleging violations of the Racketeering Influenced and Corrupt Organizations (RICO) Act.
The lawsuit alleges that one of the officers made intentional misrepresentations to Ritchie during negotiations related to loans Ritchie made to a Petters unit.
(Reporting by Art Hughes; Writing by Chelsea Emery and Jonathan Stempel, Editing by Gerald E. McCormick and Bernard Orr)
