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Hedge Fund Sues Petters, Alleging Swindle

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Oct 2, 2008 6:31 am US/Central

Hedge Fund Sues Petters, Alleging Swindle

MINNEAPOLIS (AP) ― The legal troubles are piling up for Petters Group Worldwide.

A Minneapolis hedge fund sued the company in federal court Wednesday, saying it was swindled out of $60 million.

Interlachen Capital Group says it never got its money back. The hedge fund says it may be a victim in a fraudulent scheme alleged in an FBI affidavit made public last week.

In the lawsuit, Interlachen says it gave Petters Co. Inc. $60 million to buy televisions at a discount and resell them for a profit. Interlachen says the money wasn't used to buy merchandise.

Instead, the fund alleges the money was used to fund Tom Petters' other business ventures and to personally enrich him and other executives.

Petters' attorney hadn't seen the lawsuit Wednesday and had no immediate comment.

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Items federal agents seized at Tom Petters' Wayzata home in the fall of 2008 included $13,000 in cash, numerous credit cards, a .22 caliber revolver and 11 high-end watches, including four Rolexes.

(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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