A federal judge sentenced former Minnesota business mogul Tom Petters to 50 years in prison for orchestrating a $3.65 billion Ponzi scheme on Thursday.
A jury convicted Petters last year on 20 counts of fraud, conspiracy and money laundering. The FBI raided his offices at Petters Group Worldwide in 2008 after a Petters associate Deanne Coleman blew the whistle on the operation.
In court Petters stood before Federal Judge Richard Kyle and apologized to his family. He told the judge, “Every day I’m filled with pain and anguish.”
Petters also promised to work with authorities to recover some of his victims’ losses. “For those who lost money, I will work the balance of my life and repay and repair what they’ve lost,” said Petters.
Based upon sentencing guidelines, prosecutors had asked for the harshest possible sentence of 335 years. Petters attorney Paul Engh tried to reason with the judge that in his belief higher sentences don’t make society safer and don’t deter more crime. Engh argued that such a high sentence was comparable to a murder conviction.
“What I find disturbing about the guidelines is that there’s no distinction between death and money,” said Engh. “He harmed people fiscally, but he hasn’t laid a hand on anyone.”
Judge Kyle wasn’t convinced.
“The victims’ loss is about as great as a loss of blood,” said Kyle.
The judge said like the jury, he too was not convinced of Petters’ testimony during the trial that it was his associates who conducted the fraud and he had no knowledge of it. Judge Kyle said Petters’ testimony “Didn’t pass the smell test.” “This was a massive fraud and the defendant was front and center,” said Kyle. “He was the captain of the ship.”
Kyle then sentenced Peters to 50 years in prison. With good-time behavior and time already served, Petters will be eligible for release in 41 years. Petters will be 93 year old.
Afterward U.S. Attorney B. Todd Jones told reporters, “We’re satisfied with that sentence of 50 years because it is in effect a life sentence for Tom Petters.”
Two of the jurors who convicted Petters attended his sentencing and said he got what he deserved. “Based on the trial and the evidence, I do not believe he was indeed telling the truth,” said juror Chris Harbaugh.
His fellow juror Michelle Entsminger shared his thoughts. “When you do such an extravagant crime, you have to do your time for it is how I feel,” said Entsminger. “You made your bed and now you got to lie in it.”
Petters will now be turned over to the Bureau of Prisons. There are four federal facilities in Minnesota, but Jones said the Bureau can place him anywhere in the country.
As for Deanne Coleman, she has already pleaded guilty to her role in the fraud case. Her cooperation in the investigation means she will not be sentenced to more than 5 years in prison. Coleman’s sentencing has yet to be scheduled.