Witness says he forged 10,000 documents for Tom Petters

The treasurer of the company at the heart of an alleged $3.5 billion Ponzi scheme run by businessman Tom Petters says he forged some 10,000 documents while working for Petters.

Robert White, who was the treasurer of Petters Co. Inc., admitted the forgeries during his testimony Thursday at Petters' trial at the U.S. District Court in St. Paul.

White said he made up purchase orders, bank statements, letters and other documents at Petters' request.

The idea was to make investors believe their money was being used to buy and sell consumer electronics for fat profits, but the government says the goods only existed on paper.

White said he started working for Petters in 1999, after Petters told him he needed some fake documents to placate investors who wanted to know what was happening with their money.

Petters wept, saying, "I'm ruined if you can't help me," White recalled.

White said he found Petters had a never-ending need for fake documents. And White supplied them.

White said he composed the fakes with scissors, tape, white-out and copy machines. He said he would grab logos for Sam's Club and other retailers from the Internet and paste them into forged documents.

White said Petters would sometimes try to spook him by banging on White's door while White was making up documents. Petters would pretend to be an FBI agent. White said he didn't think it was very funny, but White said Petters would laugh and laugh.

As the Ponzi scheme started to run out of money and unravel, White said he and Petters discussed ways to end the fraud--and avoid going to jail.

There was talk about buying legitimate companies and extracting money from them to pay off investors.

White was especially hopeful of doing that through Petters' purchase of Polaroid, the company that developed instant photography.

There were also talk of merging the Petters Co. Inc. into a legitimate company and then taking the combined entity into bankruptcy.

Those and other discussions were secretly taped by the FBI.

In one conversation, White says, they can "make it a conglomerate [expletive] mess no one can figure out."

White was also eager to try to buy Kodak and somehow legitimize Petters Co. Inc. and pay off investors.

White is facing reduced charges in exchange for his testimony against Petters. His testimony will continue Friday.

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