Petters attorneys want to quit over nonpayment

Tom Petters
Tom Petters booking mug shot from the Sherburne County Jail.
Photo courtesy of Sherburne County Sheriff

The defense attorneys of businessman Tom Petters are seeking permission to quit the case. The attorneys accuse the government of meddling in Petters' defense by objecting to payments from Petters' assets. The Wayzata businessman is accused of running a $3.5 billion Ponzi scheme.

In court documents, they say they haven't been paid in nearly three months, and the tab tops $560,000.

Petters' lead attorney says government offiicals initially assured him the government would not object to reasonable legal defense fees and costs. The filings say the cost of Petters' defense could top $5 million.

Last week, the government said, "The United States is concerned that there will be few assets left for victim restitution if payments for attorney fees of defendants are continually authorized from frozen funds, without any limitations and without regard for the availability of funds in an individual defendant's receivership account to pay for such fees."

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The government said as of Feb. 13, Petters' individual receivership account had only $32,000.

The filing quoted a U.S. Supreme Court ruling that says: "Congress decided to give force to the old adage that 'crime does not pay.' We find no evidence that Congress intended to modify that nostrum to read, 'crime does not pay, except for attorney fees.'"

Meantime, a federal judge has rejected a request by Petters to move his upcoming fraud trial out of the Twin Cities.

Petters maintains his innocence, and his legal team asked last month that his trial be moved to Wisconsin or Iowa, saying he would not get a fair trial in Minnesota due to intense media attention.

U.S. District judge Richard Kyle reviewed media coverage submitted by Petters' attorneys. Kyle concluded the coverage was not "so inflammatory or accusatory" as to prevent a fair trial for Petters here.

But Kyle left open the question of whether the trial should be moved because of the impact of pre-trial publicity on prospective jurors.

Kyle said the court should wait until the jury selection process is underway before making that decision.

Petters is charged with fraud, money laundering and conspiracy. His trial is set to start in June. A pretrial hearing on the change of venue and other motions is set for Wednesday.