U.S. agency to distribute about $16M to Ponzi scheme victims
Published 10:09 pm Tuesday, August 14, 2018
MINNEAPOLIS — The U.S. Department of Justice is distributing about $16 million to people who were defrauded by a man convicted of leading a multi-billion dollar Ponzi scheme.
Thomas Petters was found guilty in the scheme and sentenced to 50 years in prison in 2010. Investors had thought they were financing the purchase of consumer electronics, but the goods didn’t exist. The money acquired through the scheme supported Petters’ companies and his extravagant lifestyle for more than a decade.
The payments are going to about 360 investors worldwide, according to a press release.
Federal law said the Justice Department may distribute the proceeds of forfeited assets to people who lose money in an illicit financial scheme.
Bankruptcy trustee Douglas Kelley said he’s collected money owed to investors by squeezing funds from Petters’ personal holdings and some former companies, as well as others who worked with Petters. He said that he expects “there’s probably another $19 or $20 million that the government will distribute.”
Creditors who’ve sought compensation through bankruptcy court are on track to receive about $450 million.
Sun Country Airlines, the Fingerhut catalog company and Polaroid were part of Petters’ business empire. Most of his companies lost money while investors were swindled out of billions of dollars.