Broadsign’s Largest Shareholder In Trouble

Adrian J Cotterill, Editor-in-Chief

In 2007 Rick Engels, former chief financial officer of Petters Group Worldwide, was appointed CEO of BroadSign International Inc….

MINNETONKA, Minn., May 17, 2007 — Broadsign International, a worldwide provider of digital signage software, announced today that Patrick (Rick) J. Engels will join their organization as President and Chief Operating Officer. He comes to Broadsign from Petters Group Worldwide, where he served as their CFO and Media/Marketing portfolio manager.

It’s probably not good for Broadsign that Petters Group, who just happen to be Broadsign’s largest shareholder, is currently under US Federal investigation.

If you have ever met Petters you would know that his ego is bigger than the State of Minnesota. It’s going to be interesting to see what happens this week – more than likely every bank that lends to him will use this as an excuse to run to the hills.

Federal officials, in outlining their case, call Tom Petters the central figure in a suspected scheme that funded his work and lifestyle. Petters maintains he’s innocent, his attorney says.

By DAVID PHELPS and LIZ FEDOR, Star Tribune staff writers

Last update: September 26, 2008 – 11:28 PM

Twin Cities businessman Tom Petters, thrust into the spotlight earlier this week when his business and home were swarmed by federal agents, is the central figure in what authorities suspect is a multi-billion dollar fraud scheme that lured investors with empty promises, according to documents unsealed Friday in federal court.

In a sworn statement used to obtain nine search warrants, authorities said Petters used the capital raised through his equity company, Petters Co. Inc. (PCI), “for his other business ventures and to support his extravagant lifestyle.”

Petters is chief executive of Petters Group Worldwide, with holdings that include Sun Country Airlines, Petters Warehouse Direct and Polaroid.

Petters’ attorney, Jon Hopeman, said Friday evening, “Mr. Petters maintains his innocence and intends to fight this if he is charged.”

Petters declined to comment Friday, but Thursday night he had told a gathering of friends and business associates that the federal investigation was an “unnecessary situation.”

The government, however, claims that Petters and a circle of associates played loose and free with investors’ money by creating the impression of a successful retail business that bought and sold phantom goods for more than 10 years.

One of Petters’ associates in the alleged scheme was secretly recorded estimating the fraud could be “in excess of $2 billion,” the government affidavit said.

The government’s allegations are contained in an affidavit prepared by an FBI agent seeking court permission for a series of search warrants. It was unsealed Friday afternoon in St. Paul. Search warrants do not contain charges but rather information to back up the government’s request to search and obtain documents that might support their cases.

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Petters Group most probably own at least 50% of Broadsign.

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