According to the government's timeline, the Petters operation faced one of its toughest tests in 2000 when General Electric Credit Corporation (GECC) became concerned over late payments by PCI on promissory notes that were supposed to fund transactions with Costco.
GECC contacted Costco about the transactions and learned that Petters had supplied the lender with copies of bogus purchase orders. Costco then contacted Petters, who apologized and said the person responsible had been fired, the government says. Petters then "angrily" confronted GECC about contacting "his" retailer instead of working through PCI.
Petters tried to resolve the dispute by paying GECC $38.5 million with eight checks, but they bounced. Eventually, using investor funds, Petters was able to repay the notes and GECC closed down the line of credit, the government says.
Amy Klobuchar & Frank Vennes
6 years ago
