Feds to distribute $16M to Petters' fraud victims
The U.S. Department of Justice is distributing about $16 million to people the court found were defrauded by Thomas Petters and his associates. The payments are going to some 360 investors worldwide.
Petters was convicted of leading a multi-billion dollar Ponzi scheme and sentenced in 2010 to 50 years in prison.
Under federal law, 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 has squeezed cash from Petters' personal holdings and some former companies, as well as others who worked with Petters.
"I collected the $16 million that's going out the door by selling Petters' house and people's Ferraris," he said.
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Kelley said he expects there will be additional payments to victims.
"There's probably another $19 or $20 million that the government will distribute," he said.
Meanwhile, creditors who've sought compensation through bankruptcy court are on track to get about $450 million.
Petters' business empire included Sun Country Airlines, the Fingerhut catalog company and Polaroid. It turned out most of Petters' companies lost money while he bilked investors out of billions of dollars.
Investors thought they were financing the purchase of consumer electronics, but the goods didn't exist. The money supported Petters' companies and his extravagant lifestyle for more than a decade.