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Oct 15, 2008 11:13 am US/Central
Judge Freezes Petters Co-Defendants' Assets
MINNEAPOLIS (WCCO) ―
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Tom Petters, 51, the founder of Petters Group Worldwide is charged with fraud in an alleged multimillion-dollar investment scheme that prosecutors say spanned 14 years. (File)
CBS
A federal judge ordered the freezing of the assets of Tom Petters' co-defendents Deanna Coleman, Robert White, James Wehmhoff, Larry Reynolds, Michael Catain and Frank Vennes.
Coleman, the whistleblower in the case, asked that one of her accounts be unfrozen for "urgent living expenses." The judge agreed, allowing Coleman to have access to an $8,300 checking account.
Similarly, Vennes, a defendant in the civil suit, asked the judge for permission to sell his $80,000 golf membership because the sale of Vennes' son's home was contingent on it. The judge also allowed that transaction.
While Petters' assets had previously been frozen, the assets of all of his co-defendants had not. A receiver, attorney Doug Kelley, will be in charge of all of the defendants' accounts.
There is a lot of speculation about what triggered Coleman to turn Petters in after being part of the scheme for 14 years. There has been testimony in court that the pressure from investors was growing intense.
One investor had filed a major lawsuit against Petters in the week's right before Sept. 8, the day Coleman went to authorities. The suit filed Aug. 14 in New York federal district court by Acorn Capitol, a Greenwich, Conn. hedge fund, said Petters failed to make a $10 million loan payment on Aug. 1 of this year. Because of that default, Acorn sued Petters for all outstanding obligations which total $273 million.
Acorn is now in line in bankruptcy court with all the other creditors, hoping to get their money back.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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