A lot more will obviously come out with regard this story over the next few days [1] but let’s hope that none of the ‘associates’ mentioned in this latest article below from Business Week are former employees who now work for Broadsign?
Warrant alleges fraud by CEO of Petters Group
By AMY FORLITI
MINNEAPOLIS
The chairman and CEO of Petters Group Worldwide and several associates allegedly schemed to defraud investors of $100 million or more since the 1990s, according to a search warrant unsealed Friday in U.S. District Court.
The search warrant, executed Wednesday at the company’s Minnetonka headquarters, contains an affidavit alleging that Tom Petters, some employees of Petters Co. Inc. and associates created fictitious documents for current and potential investors.
The affidavit said the scheme tricked more than 20 investors and investment groups that had provided more than $100 million, and perhaps “substantially more.” It said a person associated with Petters and PCI had approached authorities with documents and evidence of fraud.
Jon Hopeman, an attorney for Petters, said he would not comment in detail until he read the search warrant, which was unsealed shortly before the courts closed.
“Mr. Petters denies that he did anything wrong and intends to fight,” Hopeman said.
Petters did not return phone messages left at his homes in Minnesota and Colorado.
According to the affidavit, Petters lured potential investors by telling them funds would be secured by certain transactions that were actually fictitious.
Investors were given false documents that PCI was purchasing merchandise from vendors such as Nationwide International Resource, based in Los Angeles, and Enchanted Family Buying Co., based in Excelsior, Minn. Additional purchase orders falsely said that PCI sold the same merchandise to stores such as BJ’s Wholesale Club and Sam’s Club.
Petters Group Worldwide comprises several companies, including Sun Country Airlines, Fingerhut and Polaroid. Company spokeswoman
Federal officials executed search warrants for nine properties and two vehicles.
Only one search warrant, for the office of Robert White, was made public as U.S. District Court was closing Friday. White is listed in the warrant as a former PCI officer who still consults for the company.
The affidavit accuses White of making false purchase orders related to the fictitious sale of merchandise to BJ’s, Sam’s Club, Costco and Boscovs. Authorities also searched White’s residence and two of his vehicles.
Attempts to reach White at home on Friday were unsuccessful, and his voicemail box was full.
See http://www.businessweek.com/ [2]