Today's Most Popular Video
Nov 9, 2009 6:39 pm US/Central
Confessed Fraudster Testifies Against Petters
(WCCO)
-
-
Reynolds said Petters never knew details of his background. He said when he first met Petters in the mid-90s they were making legitimate deals to resell shoes and other items, but that changed.
CBS
Monday was another interesting day of testimony in the trial of Minnesota businessman Tom Petters.
A man took the stand who has already pleaded guilty to operating one of the businesses involved in the multi-billion-dollar scheme. Larry Reynolds said he started doing fake deals with Petters 11 years ago.
On the stand Monday he admitted to lying to auditors and insurance inspectors just to keep the scam going.
Later Petters' attorneys asked for a mistrial -- a motion the judge quickly denied. The defense argued the judge made an error in not allowing them to fully cross-examine Reynolds' on his history with the Mob. If Petters is convicted, lawyers may try to use the failed motion as grounds for an appeal.
Reynolds did testify about numerous convictions, cooperation with the government and being placed into the Witness Protection Program in the mid-1980s. That's when the government relocated him and his family to San Diego. He and his family got new names, new social security numbers, new passports, new drivers licenses and for a time, he even got $1,400 a month.
Reynolds said Petters never knew details of his background. He said when he first met Petters in the mid-90s they were making legitimate deals to resell shoes and other items. But then in 1998 Petters told Reynolds he needed his help.
Reynolds said Petters asked him to create a fake bank invoice for him. Reynolds said he did, and it was not the last time that Petters asked him to commit a crime. Reynolds said that, at Petters direction, he staged inspections of warehouses, telling insurance inspectors that the warehouses belonged to Petters. In fact the warehouses belonged to another businessman.
Reynolds said Petters repeatedly ask him to lie to investors and to create fake documents saying Petters was about to receive $50 million as a payment for nonexistent electronics. He said Petters also asked him submit a fake document to an auditor who was investigating Petters.
After Reynolds finished his testimony, prosecutors introduced another tape secretly recorded by Deanna Coleman, in which Petters, Bob White and accountant Jim Wehmhoffare are heard expressing fear that accountants from a hedge fund are coming to audit them the next day. The accountants had apparently told the Petters Group they believed there was fraud at the company. Petters is allegedly heard saying it was all "a big f---ing fraud."
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Letters To Santa Sent To Sex Offender?
Click to enlarge
Stumble It!
Reporting
