Tom Petters
| Thomas Joseph Petters | |
|---|---|
| Born |
July 11, 1957 St. Cloud, Minnesota, U.S. |
| Nationality | American |
| Occupation | former CEO of Petters Group Worldwide |
| Criminal penalty | 50 years in prison |
| Criminal status | Prisoner #14170-041 in United States Penitentiary, Leavenworth |
| Children | One daughter, three sons (one deceased) |
| Conviction(s) | 10 counts of wire fraud 3 counts of mail fraud 1 count of conspiracy to commit mail and wire fraud 1 count of conspiracy to commit money laundering 5 counts of money laundering |
Thomas Joseph Petters is an American businessman and the chairman and CEO of Petters Group Worldwide who was convicted of massive business fraud in 2009 and is now imprisoned at the United States Penitentiary, Leavenworth. Amid mounting criminal investigations, Petters resigned as his company's CEO on September 29, 2008. He was convicted of numerous federal crimes for operating Petters Group Worldwide as a $3.65 billion Ponzi scheme and received a 50-year federal sentence.
Petters was raised with six siblings in St. Cloud, Minnesota. He worked at the tailor, fur and fabric shop founded by his great-grandfather and operated by his family for over 100 years. In 1973, while still in high school, he started Ear Electronics, a mail-order stereo company aimed at college students. Petters completed only one semester of college before dropping out to pursue a career. In the early 1980s, Petters worked in Colorado as a regional manager at an electronics store chain; when that business went bankrupt, he purchased five of its locations in Colorado and Kansas.
In 1988, Petters moved back to Minnesota and founded Amicus Trading, a wholesale brokerage; the name was later changed to The Petters Company, and it marketed consumer merchandise. In 1995 he started Petters Warehouse Direct to sell closeout, overstock and bankrupt company merchandise from a store in Minnetonka, Minnesota, and later in the Twin Cities and greater Minnesota. In 1998, he moved online to sell discounted merchandise through redtag.com, operated by RedTag Inc.; by 2000 he sold his Petters Warehouse Direct stores to focus on his online business, based in Eden Prairie, Minnesota. He teamed up with direct-mail merchandise company Fingerhut Companies Inc. in 2001 to start a new online store, Redtagbiz.com, which reported sales of $1 billion per year at one point.
Between 1998 and 2008, Petters created a series of investment funds through which he raised in excess of $4 billion through a variety of Ponzi schemes. These fund family names included: Arrowhead, Lancelot, Palm Beach and Stewardship. Through these funds, Petters perpetrated the third-largest hedge fund fraud case in U.S. history. Petters used these funds to finance his big box and other acquisitions. He then fabricated retail orders from those acquisitions and used them as collateral to borrow more money through the funds.
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