Federal prosecutors say they will work diligently to seize ill-gotten assets and proceeds in the Tom Petters' Ponzi scheme, but they're not optimistic about investors getting back much of the more than $3.5 billion they lost in the fraud.
Petters was convicted Wednesday on 20 counts of mail and wire fraud, conspiracy and money laundering. Jurors rejected Petters' claim that underlings carried out the fraud behind his back. Instead, they concluded Petters was the mastermind behind the biggest financial fraud in the state's history.
A close aide wearing a secret recording device captured some of Petters' desperate efforts to find more money.
Petters: "We gotta come up with a lot more money so we gotta sit here and have a brain trust."
The recordings were made days before federal agents raided Petters offices and home.
Petters: "We gotta figure out, and they just can't stare at the walls. We're gonna have to figure out what we gotta do and go sell some licenses, to get creative, to go do whatever we gotta do to raise the money to pay this. "
But Petters never came up with the money.
Assistant U.S. Attorney John Marti said the feds will be looking to seize assets and proceeds of the fraud to compensate victims, but he said investors should not expect to receive much.
"It is a sad fact that in this case, like in most Ponzi schemes, that the amount of assets that are available for restitution purposes to victims of the fraud are generally grossly inadequate to meet the need," Marti said.
Marti said the U.S. Attorney's Office is working with court-appointed receiver Doug Kelley to compensate Petters' fraud victims. Kelley has been in charge of getting back as much money as possible for victims and has been selling parts of Petters' business empire, as well as personal assets of Petters and others involved in the Ponzi scheme.
Marti said the U.S. Attorney's Office and Kelley have shared goals.
"We have been working -- both of us -- trying to meet that need," he said. "We are different parties to this proceeding but there is some commonality of interest."
Kelley has said he may go after investors who managed to make money from Petters' Ponzi scheme, attempting to "claw back" their profits. Marti won't say what his office might do in that regard.
"We are, in the U.S. Attorney's Office, going to take whatever steps are appropriate and lawful to try to maximize the amount of restitution available to the victims," he said.
Kelley has raised some $200 million by selling assets of Petters, as well those of co-conspirators who pleaded guilty. Kelley has said he hopes to raise a half-billion dollars more. But even if he's successful, that would only cover about a one-fifth of the losses suffered by investors in the Petters' Ponzi scheme.
Petters' fallen businesses also face claims from unpaid creditors. Some of those businesses have been sold. Some have gone into bankruptcy.