Petters Trial Day 9

November 9, 2009

Day 9 of the trial of Tom Petters.

The prosecution started off with some people who worked for companies like Walmart and 3M testifying. Most of the testimony was about the phony purchase orders alleged to have been used to get big loans that fueled the Petters Ponzi scheme, or as Bob White put it, "feed the demon".

At 10:00, Larry Reynolds took the stand. Judge Kyle read his plea agreement and Assistant U.S. Attorney John Marti questioned Reynolds about his criminal activity years ago before Larry Reynolds, then Larry Reservitz ended up in the Witness Protection Program (WitSec).

Marti asked Reynolds if he was a member of La Cosa Nostra. Reynolds said, "The last time I checked, they don't accept members of the Jewish faith."

Reynolds testified about his business dealings with Tom Petters, the phony invoices, the fake warehouses, and the money laundering.

Reynolds talked about visiting Tom Petters in his suite at the Bellagio in Las Vegas and how Petters considered making Deanna Coleman the fall gal for the scheme.

When Reynolds visited Minnesota in October of 2008, Petters drove him to the airport. As he drove, Petters told Reynolds that Bob White would flee the country and suggested Reynolds flee also. Reynolds was arrested after he arrived home in Los Angeles.

Defense attorney Paul Enge challenged the witness's credibility in redirect examination., referring to Reynold's criminal history again and again. The prosecution objected often and Judge Kyle sustained most of the objections. After a few more minutes, Judge Kyle called the attorneys to the bench.

Paul Enge was done questioning Larry Reynolds and the prosecution proceeded to play another recorded conversation from the wire Deanna Coleman wore to a meeting in September, 2008.

Frank Vennes called to warn Tom Petters about auditors from the Palm Beach hedge fund heading to PCI to check the books.

Petters tells Coleman and White, "This is one big fucking fraud and I'm dealing with it."

Around 4:30, the tape was stopped and the jury filed out. Paul Enge complained to the judge that his client was being denied his right to a public trial guaranteed by the sixth amendment to the Constitution because he thought the public needed to know what was in Larry Reynold's WitSec file. Enge called for a mistrial.

Judge Kyle denied the motion.

Tomorrow, Michael Catain is scheduled to testify.