Pioneer Press Article About Richie Capital

John Welbes has a long article about Thane Richie and the lawsuits:

Led by Thane Ritchie, the firm got stiffed for about $260 million when Petters' Ponzi scheme imploded in 2008.

Later this week, a civil racketeering lawsuit that Ritchie Capital brought against two former Petters executives is scheduled for a hearing in federal court in Chicago.

The Petters executives named in the suit are former Polaroid Corp. CEO Mary Jeffries and Camille Chee-Awai, who was the CEO of Petters Capital. Neither has been charged with any crime. But Ritchie claims that the two were part of a fraud — separate from the Petters Ponzi scheme — that cheated Ritchie out of a secured position in Polaroid, and $260 million.

At the Chicago hearing, Judge John Darrah will be asked to rule on motions from Jeffries and Chee-Awai to dismiss the racketeering suit and, separately, to move it to federal court in Minnesota if he doesn't throw it out.

--snip--

As Tom Petters' criminal trial wrapped up in December, an organization called "Stop the Petters Scam Foundation" started running ads in the Minneapolis-based Star Tribune. The ads laid out a long list of complaints about how the case had been handled by federal authorities. The foundation is supported by Ritchie Capital.

When the Star Tribune cancelled the ad run after nine installments had appeared, the foundation sued the newspaper for breach of contract. The foundation claims the Star Tribune was pressured by persons unknown to stop printing the ads.

The foundation's case is without merit, said Ben Taylor, a spokesman for the Star Tribune. The Star Tribune's own judgment was used in the decision to stop running the ads, he said. The remaining ads appeared in the St. Paul Pioneer Press.

The foundation hasn't backed off that lawsuit, and in the last couple of weeks has subpoenaed a series of prominent Minnesotans. "We're just trying to determine who, if anybody, involved in the Petters case contacted the Star Tribune to get ads dropped," said Phil Villaume, an attorney representing the foundation.

Subpoenas have gone out to U.S. federal district Court Judge Ann Montgomery, who's handling the Tom Petters civil case; former U.S. Sen. Norm Coleman; U.S. Sen. Amy Klobuchar; Doug Kelley; and Deanna Coleman, a Petters executive who led federal investigators to the Ponzi scheme, pleaded guilty to fraud and testified against Petters at his trial.

People close to the case said several of the subjects of the subpoenas would contest being forced to give depositions.

Read the entire article.

I just took a look at the Stop the Petters Scam website. The website looks a little shabby - some of the links are broken. This pop-up has a picture of Judge Ann Montgomery - the caption says "Dean Vlahos" (click on screenshot to make bigger):



Speaking of broken links, there are many links from this blog to the petters-fraud.com website which is no longer online.

Topix Forum Post About Tom Petters

Why does "Petters Attorney Decries 'Rush to Judgment'" have 13,762 comments?

Saint Cloud Times Series on Petters

Begins with article about Doug Kelly.

With a history of finding himself in the middle of some of the most high-profile cases, it’s no surprise Kelley is at ground zero of the Tom Petters fraud case.

His role in it, though, might surprise.

Read the whole thing.

Day Two of the series - The Money Chase: Team hunts globally for Petters' assets.

Petters Sentencing Moved to March 15th

AP via Strib:

ST. PAUL, Minn. - Minnesota businessman Tom Petters' sentencing for orchestrating a $3.65 billion Ponzi scheme has been rescheduled to March 15.

U.S. District Judge Richard Kyle rescheduled the sentencing in an order Friday.

Polaroid Art Collection to be Auctioned Off

The NY Times has the story.

A.D. Coleman comments on the NYT article at Photocritic International.

Vogel gets one substantial fact dead wrong when she writes, “To pay off creditors, a bankruptcy court in Minnesota is forcing Polaroid to sell a portion of its collection at Sotheby’s in New York on June 21 and 22.” The Minnesota Bankruptcy Court is definitely not “forcing Polaroid to sell a portion of its collection at Sotheby’s.” The Minnesota Bankruptcy Court has merely endorsed the debtors’ fervent plea to allow this sale to go forward; it didn’t require it of them. In short, the current holders of the collection initiated this sale, not the court; the fact that this will happen under a ruling known generically as a court order should not get interpreted as the court requiring reluctant parties to conduct a fire sale. In this case, the sellers can’t wait to get rid of the stuff, in which they have no interest outside of its cash value.

It’s also important to point out that the entity selling off the collection is neither the original Polaroid Corporation nor the company now marketing products under the Polaroid brand name. It’s PBE Corporation, formerly known as Polaroid Corporation, a segment of the husk of Petters Group Worldwide, which got dismantled as a result of the collapse of a Ponzi scheme that operated under the name Petters International. (Petters has now been tried and convicted for that crime.) I know this gets arcane, but as journalists we need to exercise great precision in using the name Polaroid to identify a legal entity at this juncture, given that it applies to two now-defunct corporations and can also get construed as referring to the current holders of that brand name. In point of fact, no extant legal entity now goes by the name Polaroid Corporation.

Read the whole thing.

Land of 10,000 Ponzi Schemes

Kare 11 reporter Trisha Volpe asks; Hecker just another Petters?

The charges are about the same. The amount of money at issue in the criminal charges is very different. Petters was convicted in a more than $3 billion dollar ponzi scheme. Hecker is charged with allegedly defrauding lenders and others of several million. If found guilty, Hecker could still go to prison for a very long time.

But will there be audio like this?

Tom Petters Sentencing Scheduled for March 10

AP via ABC News:

Minnesota businessman Tom Petters is scheduled to be sentenced March 10 on his conviction for orchestrating a $3.65 billion Ponzi scheme.

Cost of Peters Fraud in Fees etc.- $12 million

Dave Phelps in the Strib:

In addition, legal fees for Frank Vennes, a heavy investor in the Ponzi scheme, are at $884,000 even though Vennes was not charged. Fees incurred by the receiver who is liquidating the Vennes estate are another $580,000 and rising.

On Monday, a request for another $485,000 in fees will be before U.S. District Judge Ann Montgomery who is overseeing the Petters and Vennes receiverships.

List of lawyers fees:

Felhaber, Larson, Fenlon& Vogt* Petters criminal defense $3.3 million

Kelley & Wolter Receiver for Petters & his co-defendants $1.9 million

Lindquist & Vennum Assisted receiver in asset search $1.7 million

PricewaterhouseCoopers Accounting work for receiver $1.6 million

Faegre & Benson Defense attorney for Frank Vennes $884,000

Oppenheimer Wolff & Donnelly Receiver for Vennes' estate $582,000

* Includes attorney Paul Engh's feesSource: U.S. District Court orders

$884,000 for Vennes? Interesting.

A a May 1st, 2009 affidavit from the Vennes receiver Gary Hansen about Vennes and his legal fees says they are for legal work both both civil and criminal. The legal fees for Vennes back them were only $178,603.50.

Email from the exhibits posted on the MN DOJ website:



Audio of Petters and Vennes talking religion:

Petters Trial Trading Cards... Free!

All cards with sketches from the Petters trial at the Federal Courthouse in Saint Paul.

Click on the cards to make them bigger and download.

First Batch - Tom Petters, Larry Reynolds (Reservitz), Michael Catain and Deanna Coleman.

Second Batch - Greg Bell, Jim Wehmhoff, Tracy Mixon and Ted Deikel

Third Batch - Assistant U.S. Attorneys Joseph Dixon, Tim Rank, John Marti and Judge Richard Kyle.

Fourth Batch - Dean Vlahos, Bob White and defence attorneys Jon Hopeman and Paul Enge.

The Clawback Continues

John Welbes in the PiPress:

The task of recouping the cash that flowed out of the Tom Petters fraud scheme continues. Paying it back won't necessarily be an easy task, even for those being asked to return relatively small amounts.

Cathedral High School in St. Cloud had nothing to do with the scheme. But Petters, who graduated from the school in 1975, gave four separate gifts totaling $252,900. Now, the school is being asked to give it back, Mike Mullin, the school's president, said Thursday.

The money was used a couple of years ago to build an elevator at the school. "None of it is sitting around," he said.

Right now, all Cathedral has is a letter from Doug Kelley, the court-appointed receiver in the Petters case, asking for the money back. Cathedral hasn't received a court order, Mullin said. Regardless, the school doesn't have an easy way to raise the cash.

"One thing we've resolved is that we are not going to negatively impact our current or future families," Mullin said. The school's other options are limited. Mullin mentioned fundraising "or taking the elevator and shipping it" to the Twin Cities as payment.

A federal jury in St. Paul found Petters, 52, guilty of 20 counts of fraud in early December following a six-week trial. The Minnetonka businessman was at the center of a $3.5 billion Ponzi scheme that collapsed in 2008 and led to a flurry of criminal charges, bankruptcies and many investors left with nothing.

Kelley said he has recovered about $200 million in assets from the individuals involved in the scheme so far. But bigger fish are still on his line, as he's identified $500 million worth of additional "clawback" actions, much of it from investors who got more out of the scam than they put in.

For example:

A 38-foot 2008-model Fleetwood Bounder motor home — valued at $110,000 and belonging to Deanna Coleman, a onetime Petters executive — was sold recently. A court filing by Kelley this week says the Fleetwood was sold along with a Haulmark trailer and a heated storage unit for $148,500. The money goes into a fund that eventually will be used to give something back to victims and creditors.

At parent company Petters Group Worldwide, Coleman worked closely with Tom Petters and was central to the fraud scheme that attracted investors by promising substantial returns. She went to federal authorities in 2008 and exposed the scheme, later pleading guilty to one count of conspiracy to commit mail fraud. She testified against Petters at his trial in the fall.

Northwestern College Trustee Fracas

The Gospel Coalition asks; What’s Going on at Northwestern College and Radio?

For the past few years I’ve been hearing that something is going quite wrong at Northwestern College in St. Paul, MN, under the leadership of President Alan Cureton.

There’s now a website–Friends of Northwestern College & Radio–that seeks to provide some explanation and documentation of what’s going on there. The most recent posting, I believe, is a letter from five former Trustees.

A letter (PDF) from from the Friends of NWC website :

October 27, 2008

To Friends of Northwestern College and Radio:

We whose names are listed below have all served on the Board of Trustees of Northwestern College and Radio, and we possess a continuing passion for its future and for the glory of Jesus Christ in its ministry. We humbly ask that you read what follows with a prayerful, open mind. What we share is public information, but not all of it is yet widely known.

Over the past year, a total of seven people –about 1/3 of the Board of Trustees of Northwestern College and Radio –have voluntarily resigned from the Board, or have been removed or denied continued appointment by the Board’s majority. Some were among the longest serving trustees. All were thoughtful voices of occasional dissent and consequently considered to be impediments to the President’s leadership. When demanded by the Boar to give the President their “complete and unfettered support,” the seven trustees, in good conscience, could not comply. They had too many concerns to do so.

These, now, ex-trustees are not alone. Many current employees of Northwestern College and Radio share the deep concerns that these trustees attempted to raise at the Board level, but they cannot speak freely. We believe their concerns need to be aired. They raise issues of integrity and leadership performance, as well as institutional direction and governance.

What’s going on? The culture of Northwestern College and Radio appears to be changing rapidly and drifting from a heritage that is firmly grounded in commitment to the authority of Scripture and theological conservatism. The reality of the state of affairs in both the college and the radio ministries is difficult for the public to discern, but indications of institutional change are evident to many within.

The campus is badly divided, and many recognize that thoughtful dissent is neither welcomed nor tolerated. Those expressing concerns are silenced or marginalized. An atmosphere of fear and distrust has been documented by campus surveys. Some employees have been intimidated and pressured to resign. Others have been disciplined after having been promised that they could voice opinions freely without retribution. Still others have chosen to leave and find work elsewhere, yet they remain troubled and prayerful about what’s happening in both Northwestern’s educational and media ministries.

The leadership publicly avows that all is well, that nothing has changed, that Northwestern remains committed to its historic positions, and that any concerns being voiced are coming only from a small group of disgruntled people. We believe the leadership knows otherwise. Our purpose for raising these matters is that Northwestern College and Radio might, by God’s gracious intervention, be spared the fate of so many other institutions that have witnessed the dying of the light because they drifted from and, eventually, abandoned their Christian heritage. We ask that you pray with us for the truth to be known and for Northwestern to truly claim its historical vision, articulated by President Bill Berntsen, to be “a first-rate, trustworthy, dependable, distinctively Christian, faith-affirming, overtly conservative College...uncompromisingly committed and loyal to God’s Word, the Bible…”, for the glory of the Lord Jesus Christ.

If you choose to explore the matter further, please visit www.friendsofnwc.com. You will find some individual stories and other important materials posted there.

Earnestly and prayerfully,

Galen Call
John Helmberger
Bruce Pearson
Paul Sentman
Gary Shaffer

From the 990 form for the Fidelis Foundation:

Fidelis Foundation
3189 Fernbrook Ln. N.
Plymouth, MN 55447-5320
Type of Grantmaker: Public charity
IRS Exemption Status: 501(c)(3)
Additional Descriptor: Organization that normally receives a substantial part of its support from a governmental unit or from the general public
Financial Data (yr. ended 9/30/07): Assets: $31,383,893; Total giving: $3,003,894
EIN: 300006857
990: 2006 2005 2004 2003 2002
Last Updated: 7/27/2008


Purpose and Activities
The foundation helps Christian ministries fulfill their missions by providing financial support for their programs, as well as resources to maximize their effectiveness.

Fields of Interest
Subjects
Christian agencies & churches

Officers and Directors
Note: An asterisk (*) following an individual's name indicates an officer who is also a trustee or director.

G. Craig Howse,* Chairperson
Joseph L. Smith,* President
Garth Warren, Vice President
L. John Buyse
Sam Crabtree
Bruce Pearson

The NWC Column explains the relationship between Vennes and the college:

Former board member implicated in fraud case

A former Northwestern College trustee has been implicated in a multi-billion dollar fraud. Frank Vennes Jr., who resigned from the college board in December, collaborated with Twin Cities businessman Tom Petters, who is currently under federal investigation. Northwestern avoided any financial entanglement with the scheme, but not all local organizations were so fortunate.
Vennes, who served on the Board of Trustees for four years, was described by the FBI as a broker with investors in Petters’ companies. Vennes is quoted in the document, warning Petters and others that if investors were to send auditors to visit warehouses where non-existent merchandise was supposed to be located, “the scheme would implode.”

That statement came in an FBI affidavit used to obtain nine warrants allowing the FBI to search Petters’ Minnetonka business headquarters and Wayzata home. The FBI stated that the money Petters was raising through his equity company, Petters Co. Inc., was actually being used to fund personal expenses and other business ventures. Vennes’ home was also searched.

This isn’t the first brush with the law for Vennes. In May 1987, Vennes was indicted for money laundering, firearm violations and drug offenses. According to the 1994 Court of Appeals case detailing the incident, “an undercover agent, posing as a Chicago investor, contacted Vennes and asked for help in transferring cash abroad. Vennes later admitted that in the next three months he and his codefendants received $370,000 from the undercover agent and transferred it, minus their substantial commissions, to the Bahamas, the Isle of Man, and Switzerland without complying with federal currency transaction reporting laws. In the last transaction, Vennes personally delivered $100,000 to Switzerland, where his associates “lost or stole it.”

Following the loss of the $100,000, the undercover agent told Vennes that he was not a Chicago investor, but rather a member of the Chicago underworld, and that he must recoup the loss, or the Mafia would dismember his children and kill his wife. Vennes claimed that because of these threats he began illegally selling firearms and drugs as a way to make up for the lost money.

Vennes pleaded no contest to one count of money laundering, one count of illegally selling a firearm, in addition to using a telephone to facilitate distribution of cocaine. His attorney urged that Vennes be sentenced to only two years in prison because he became “involved in the drugs and the guns” out of fear that he and his family would suffer if he did not recoup the $100,000. The court, however, sentenced Vennes to prison for five years – three for the money laundering, and one year for each of the other two offenses.

At the time of the 1987 case, Vennes, as part of a plea agreement, pleaded no contest to one count of the money laundering indictment, one count of illegally selling a firearm as well as using a telephone to facilitate distribution of cocaine.

Following his release from prison in 1993, Vennes commenced a Bivens action, seeking damages from unnamed agents for entrapment, outrageous conduct, and willful violation of the tax laws. Vennes tried to once again prove that the only reason he engaged in the illegal actions involving the guns and drugs was due to the outrageous threats given him by the undercover agent. In the end, the Bivens action was denied as the court could not verify Vennes’ claims.

For an institution such as Northwestern, the notion of change, forgiveness and believing in Christ’s ability to bring about transformation in lives certainly isn’t a foreign concept.

Vennes says he converted to Christianity during his stay in prison. Years later, when he was being considered as a member of the Board of Trustees in 2003, the board was convinced of the authenticity of his conversion.
President Alan Cureton commented on the circumstances that Vennes was brought onto the Board.
“None of the VPs were involved in his recruitment as a board member. In fact, I am the only person left on the board who was directly involved in his recruitment. The full board knew of his past and his conversion experience in prison. Disclosure was made. It was not our place to hold judgment regarding his past sins, but we did believe it was appropriate to offer grace and move forward. It is unfortunate what has happened…”

Brook Berry, Vice President of Marketing, was quick to speak of Northwestern’s need to believe in a God who can bring about change and hope in the lives of the hopeless. He stressed this need to forgive, saying: “Northwestern certainly believes in the power of Holy Spirit to transform lives – even the lives of those in prison. God can do miraculous things. Look at Chuck Colson, for example. It is important to remind our campus community that Frank Vennes is a fellow believer."

“We must not be too quick to condemn those who have might have fallen back into self-destructive behaviors. The Church has a long history of shooting our own wounded. Now, more than ever, we need to respond with grace and the hope of redemption. Northwestern should reflect the heart of the Savior who died for the sinful nature in us all.”

The Star Tribune, which originally broke the story of Petters’ indictment on Sept. 26, mistakenly described Vennes as a current member of NWC’s Board of Trustees. Vennes actually resigned from the board last December for personal reasons. The correction was printed in the Star Tribune’s Sept. 28 issue.

In an e-mail sent out to students and faculty Oct. 1, Northwestern’s Marketing and Communications said the college had no financial ties to Vennes or Petters, encouraging members of NWC to “Be assured that none of Northwestern’s investments are in any way involved with the Petters financial crisis.”

This is good news for Northwestern. Not all organizations were as fortunate, however.

Minnesota Teen Challenge, a faith-based, nonprofit organization focused on rehabilitation of drug addicts, invested with Petters. The Fidelis Foundation, a public charity that additionally acts as an investment agent on behalf of other public charities and nonprofits, including Teen Challenge, is facing losses of up to $27.6 million in Petters Co. notes.

Richard Scherber, the executive director of Teen Challenge, told the Star Tribune that Vennes was a member of the Teen Challenge board as well as the financial committee that reviewed the investment proposal with Petters’ business. Scherber says Vennes never pushed the board to make the investment with Petters Co..

The money that Teen Challenge had invested in Petters Co. was given through a single contributor, not through the donations of other contributors, said Teen Challenge’s finance director Ron Goodman.

Scherber told the Star Tribune, “It’s hit us in the jugular. [Teen Challenge] is saving lives. You can imagine financially how this has impacted us.”

Goodman says that Teen Challenge believes it is still owed approximately $5.8 million in principal and interest.

Berry grieved with Teen Challenge’s loss. “Our hearts go out to our friends at Minnesota Teen Challenge. It is a powerful ministry that can provide hope and second chances to young people trapped in desperate life situations. This must come as a serious blow.”

-by Jacob Wielgus, news editor

And don't forget the "dirty money"....

Petters Defender Bradlee Dean Calls President Obama "a Domestic Enemy"

Bradlee Dean, on his AM 1250 The Patriot Sons of Libery radio show
called President Obama a "domestic enemy"

Bradlee Dean is a stalwart supporter of Tom Petters and has compared Tom Petters to Jesus.

Bradlee Dean has also called a recent U.S. Marshal appointment illegal because she is a lesbian.

More at the Dump Bachmann blog