Federal authorities investigate Petters Group

Special agent Paul McCabe
FBI special agent Paul McCabe talks on a cell phone outside of the Petters Group headquarters in Minnetonka, Minn. FBI, IRS and U.S. Postal agents executed a search warrant at Petters World Headquarters earlier this morning.
MPR Photo/Brandt Williams

Investigators from several federal agencies raided the Minnetonka headquarters of Petters Group Worldwide Wednesday. Authorities also searched the residence of CEO Tom Petters.

The company's holdings include Sun Country Airlines, Polaroid, and Fingerhut. The feds aren't saying what they're after, and Petters Group says it really doesn't know either, but the investigation is focused on a financial business.

The FBI is expected to provide another statement on the investigation later this evening

FBI special agent Paul McCabe says authorities executed the search warrant at 9 a.m. Agents of the FBI, IRS, U.S. Postal Service and the U.S. Attorney's Office were participating. Some 160 Petters employees were told to get their personal things and leave the building. McCabe said the warrant included the entire building.

Petters World Headquarters
The exterior of Petters World Headquarters that federal agents from the FBI, IRS and U.S. Postal Service searched earlier today. Later in the afternoon, officials confirmed they were searching Tom Petters personal residence.
MPR Photo/Brandt Williams

McCabe said the search warrant, which details the reason for the raid, will not become public until after the FBI gathers and inventories everything agents take. McCabe would not offer an estimate of how long that will be, and he provided no insight into what brought Petters under scrutiny.

"I won't comment on any specifics. Other than it's an ongoing federal investigation," he said. "And there were no arrests."

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Petters Group has a stake in some 60 companies. And it generates about $2.5 billion in annual revenue. The company's forte has been turning around down-and-out that are often at risk of going out of business.

Petters Group says its core areas are merchandising, brand management, technology, aviation, real estate and investment capital.

Petters Group spokeswoman Andrea Miller said the federal government appears interested in just one of Petters' companies, but the feds aren't yet saying which one.

"The investigation is pertaining to one financial entity within Petters Group. It does not involve Sun Country, Polaroid, Fingerhut, Great Water Media. We are cooperating with the officials to the best of our abilities," Miller said.

Great Waters Media is a magazine group Petters recently acquired.

Miller said she had no reason to believe any Petters' company had done anything to warrant such attention from law enforcement authorities.

Sun Country Airlines, which is owned by Petters Group Worldwide, is not affected by the investigation and continues to fly its normal schedule, Miller said. Meanwhile, she said the company is awaiting word from the FBI about when employees can return to work.

The FBI is expected to provide another statement this evening.