Original subtitles

In this episode of American Greed, in Minnesota's Twin Cities, billionaire Tom

Petters is the face of business success.

He was a deal chaser and a deal maker, you know. He was a mover and shaker. You

couldn't hold Tom down.

Eight million dollar house out in Lake Minnetonka.

I think the one in Palm Beach was $15 million.

A local boy made good who never forgets where he came from.

We are a very caring company. That's one of our core values. This is a hometown

guy who cares about his hometown, who cares about people losing their jobs.

guy is the real deal, nothing to worry about. There seemed to be no reason at

all to suspect that something was awry.

Everything about Petters is blue chip.

Or so it seems.

His companies include iconic American brand Polaroid, Sun Country Airlines,

retailer Fingerhut.

But Tom Petters' reputation is built on a foundation of lies.

His legitimate business is purchased with dirty money.

Petters wasn't really that smart.

He wasn't really that good a businessman.

But he was a damn good conman.

And when his closest confidant turns on him, the Tom Petters empire, all three

and a half billion dollars of it, begins to crumble.

This is one big fraud, and that's what it is, and that's how I deal with it.

Las Vegas, September 24th, 2008.

The Bellagio Hotel is a favorite heart of billionaire CEO Tom Petters.

This morning he has a 7 a .m. wake -up call, but it's not housekeeping or room

service.

It's the FBI.

The head FBI agent, who was a woman, knocked on his door.

Petters called lawyers and clammed up.

Back home in Minnesota, more than 50 federal agents are rating his company,

Petters Group Worldwide, on suspicions of fraud.

It's a dramatic about -face for the well -respected CEO.

For more than a decade, his high -flying lifestyle takes him around the world,

wooing investors and selling the Petters brand.

Tricia Volpe reports on Petters dealings for NBC affiliate KARE.

He was what many people would consider the American dream come true.

And he built himself up to be the consummate tycoon, corporate tycoon, to

owner, the president, the CEO of some of the most recognizable companies in the

world.

Petters employs 3 ,200 people, has more than 50 offices around the world.

and in 2007 reports $2 .3 billion in revenue.

Our companies aspire to be the best.

But today, Tom Petters is under siege. His public face hides a desperate man at

the end of his rope on the Las Vegas Strip.

And the FBI is catching it all on tape.

The story begins in the small town of St. Cloud, Minnesota.

The year is 1973.

And at just 16 years of age, young Tom Petters is already showing a passion for

business.

He opens his own store called Ear Electronics.

Petters' sister, Becky Randa, recalls his humble beginnings.

It started in our basement, and then he went to head a business downtown when he

was supposed to be in high school.

and he had an office with his secretary, and he was guaranteeing the lowest

prices in the nation.

Petters even hires salespeople, marketing his goods to college kids,

mother finds out.

She was listening to the radio, and they were interviewing Tommy, and she

thought he was in school, but he was not.

In the early 1980s, Petters marries, starts a family, and heads west.

He manages a small chain of electronics stores in Colorado and eventually buys

the company.

In 1990, Petters files for bankruptcy.

Authorities say he leaves a trail of unpaid debt in his wake when he skips

and heads home to Minnesota, divorced, jobless, and flat broke.

I think he was overwhelmed. He had, you know, two little kids, and he was

extremely broke.

He essentially had nothing, and he was looking for the next thing.

Tom Petters, always the businessman, always the salesman, was looking for the

next sale.

With a loan from his brother, Petters launches a new venture, the Petters

Company Inc., or PCI.

It's a brokerage of opportunity goods.

Odd lots of close -out or distressed products that Petters buys up and

to big -box stores.

Harold Simmons has worked as a salesman with Petters for more than a decade.

If it was a $10 item, we could buy that product for $5.

And if we could sell it for $7, we made good margins.

In 1995, Petters decides to try his hand at retail once again with a chain of

stores called Petters Warehouse Direct.

We were in the closeout business.

In this promotional video, employee Deanna Coleman, who goes on to play a

role in Petter's fraud scheme, describes how it all started. Tom got a phone

call from Kmart about two trailer loads of return merchandise.

And, of course, Tom doesn't ever turn down a deal.

So what did Tom decide to do? He decided to open up Petter's Warehouse Direct,

and he wanted it to open the day after Thanksgiving.

This time, Petters finds success.

In a few years, he has 12 stores in Minneapolis and North Dakota with annual

revenues of $20 million.

But Petters has bigger aspirations.

And with the rise of the Internet, he jumps on opportunities to sell to the

masses, starting international sailor RedTag .com and buying retail auction

YouBid .com.

Tom had a brilliant mind. Still does.

Put together deals, he was the best I ever saw.

But they couldn't hold his attention.

After he put them together, he was pretty much through with them, and he

looking for the next deal.

The deal that really puts Petters on the map is the purchase of Finger Hut in

2002.

The Minnesota -based catalog wholesaler is in danger of being shuttered by

parent company Federated Department Stores.

Until Tom Petters becomes the savior of St. Cloud by teaming up with another

Minnesota businessman to purchase the company.

This was certainly a good thing because it saved jobs, and it also helped

contribute to his image. You know, this is a hometown guy who cares about his

hometown, who cares about people losing their jobs, and he wanted to do

something about it.

As Petters cashes in on his newfound status as a hometown hero, his public

appears to be golden.

We are a very caring company. That's one of our core values, caring about people

you work with, caring about the communities you live in, caring about

that works next to you, caring about families.

But investigator Randy Shane uncovers a different story.

He's hired to check out Petter's operation by a financial group looking

money into a hedge fund that invests heavily with Petter's.

Shane's first tell is Petter's profile on business information service Dun &

Bradstreet. And in that report, it said that Mr. Petter's graduated from a

Minnesota college called St. Cloud University.

We then sought to verify that, and it turned out he attended for a semester,

which is pretty much as broad a gap as you can get, right? I mean, not eight

semesters, not six, not five, one.

Shane asks himself, what else could Petters be lying about?

And he keeps digging.

What we started to see was a number of, a great number of lawsuits naming him

and or his companies over a period of approximately 13 or 14 years in which he

was getting accused of simply not paying money back or not paying for products

that he had purchased.

Worse, Shane discovers that Petters had been convicted of check fraud in

Colorado in 1990 and had even become a fugitive.

According to the records we saw, he was extradited from Minnesota to Colorado to

go to jail.

Years later, Petters hires an attorney to get the file sealed, and little more

is known about the incident.

Now, we never were able to get the final records of how long he served and so

on, but from everything we saw, he actually was reporting to jail in mid

Shane reports his findings, and his clients decide not to invest.

But many others are lured in by Tom Petter's big smile, his charisma, and

promises of huge returns.

Next on American Greed, Tom Petter's empire appears to be rock solid.

But is it all an illusion?

It was, in fact, one of the biggest frauds in Minnesota history and the

fraud in the nation's history before Bernie Madoff came along.

In the early 2000s in Minnesota's Twin Cities, entrepreneur Tom Petters is

making big moves.

He owns a successful local chain of warehouse direct stores, multiple

retail sites, and his recent acquisition of catalog retailer Fingerhut puts him

among the top players in Minnesota business.

He was a deal chaser and a deal maker, you know. He was a mover and shaker. You

couldn't hold Tom down.

The deals were getting bigger, and Tom didn't have the financing to

bankroll the deals.

So, therefore, that brought on the investors.

Petters begins trading on his reputation, offering potential investors

of the dream.

Through his Petters Company, Inc., or PCI, a wholesale brokerage firm focusing

on a niche business known as diverting.

Diverting is taking product, closeouts, out -of -dates,

that would not sell to the big box stores.

They would sell them to us. We would divert them into another company that

divert them into that, into the big box stores.

That's diverting. That's the way it all came about.

Petters decides to offer promissory notes, essentially IOUs with 60 - or 90

terms and stunningly high returns.

I recall the interest rates being 20%, maybe a little more than that.

Doug Van Dyke is recently retired from a 30 -year career as an engineer.

He and his wife learn about the deal through a mutual friend of Tom Petter's.

Before jumping in, Van Dyke does his due diligence.

Everybody came back with, this guy is the real deal, nothing to worry about,

this is good.

And so there seemed to be no reason at all to suspect that something

was awry.

For more than six years, he leaves his entire nest egg, several hundred

dollars, in what he thinks are good hands.

And the Van Dykes are able to live comfortably off their returns.

There was literally hundreds of thousands of dollars that were earned as

They fund their favorite Christian charities, purchase a spacious lakeside

retirement home in northern Michigan, and a winter condo in south Florida.

I'm a heavy -duty water skier, believe it or not, and so it was something that

allowed me to be able to water ski year -round. We had our boats up at the

home on Lake Leelanau in the summertime.

Petters' steady returns even attract the attention of hedge fund managers around

the country who begin feeding him hundreds of millions of dollars.

And Tom Petters is becoming filthy rich.

So rich, his Petters Group Worldwide is able to start acquiring dozens more

companies. In one of his most high -profile moves in early 2005, Petters

Worldwide purchases the iconic brand Polaroid for $426 million.

Then from there, he started, you know, taking the

Polaroid name and putting it on TVs, which had never been, DVDs.

He exposed the Polaroid name.

They were losing money big time when he bought them, but he bought it for the

name.

A year later, the CEO starts Petters Aviation and buys a controlling 50 %

in Minneapolis -based Sun Country Airlines.

It suddenly puts Petters worldwide on a national and an international stage.

And according to Petters' sister, Becky Randa, the small -town Minnesota boy has

truly arrived.

Well, it definitely changed.

We went to a family...

Reunion, he picked us up in a Learjet and took us there. It was fun.

By 2008, Tom Petters gains entry into the Billionaires Club, enjoying all the

toys and trappings that come with membership.

$8 million house out in Lake Minnetonka. I think the one at Palm Beach was $15

million that he bought it for.

And each one of those places usually had a Bentley.

He would have a boat.

Rolex watches were important to him.

Petters also trades in the Learjet for a private, customized Boeing 727 that

flies him around the world, where he likes to wine and dine potential

But Petters' public image isn't all about the glitz.

He's just as well known for giving back.

He's a major political contributor, and he donates millions of dollars to dozens

of charities and universities in the area.

including $3 million to his mother's alma mater, the College of St. Benedict,

and a $10 million pledge to Miami of Ohio University, where his son attended,

for a proposed Center on Leadership and Ethics.

This is a guy that had a tremendous impact on this community.

He gave money away. He was involved in community organizations.

I mean, he, everyone knew him, everyone loved him.

Next on American Greed.

Is Tom Petters an entrepreneurial philanthropist or a self -serving

It's easy to be charitable when you're giving away other people's money.

At the start of 2008, Tom Petters is one of the Twin Cities' richest

businessmen. In less than 15 years, Petters has gone from flat broke to

and CEO of Petters Group Worldwide, with a personal net worth of $1 billion.

I mean, Tom Petters was a local Horatio Alger story.

He acquired an interest in the Fingerhut Corporation.

He bought Polaroid.

He purchased Sun Country Airlines.

His rise was meteoric.

Our core values tie into our entrepreneurial spirit.

But it hasn't been all triumph for the billionaire CEO.

In 2004, amidst some of the biggest business deals of his life, the dream is

tragically interrupted when his 21 -year -old son, John T. Petters, known as JT,

takes a spring break trip to Florence, Italy.

in what has been deemed a horrible misunderstanding.

J .T. was in a private garden with a friend late at night when he was stabbed

a local man who thought he was a burglar.

He bled to death before medics could save him.

Tom Petters is devastated.

He was horrified. I mean, he loved J .T. so much.

He just fell apart, absolutely fell apart.

He was depressed.

He was down.

He started drinking. He started abusing prescription drugs.

Tom Petters had this enormous business empire to run.

So when he started to sort of lose sight of things and started to become

withdrawn and very sad and depressed about his son, that no doubt had an

on the business.

But in March of 2004, Tom Petters decides to turn his personal tragedy

opportunity. He starts the John T. Petters Foundation to provide

college students for foreign travel.

We created a foundation, so now we're raising money. His daughter Jenny is the

chairman. Petters spends upwards of $400 ,000 on lavish annual fundraising

galas, attracting the likes of Michael Strahan, Kevin Nealon, David Spade, and

who's who of Minnesota politicians, including Governor Tim Pawlenty.

The way Petters publicly handles his personal tragedy makes him even more of

respected figure in the Twin Cities.

Everyone, it seems, trusts Tom Petters and wants to invest with him.

We're doing a $2 billion fund called Petters Strategy Growth Fund.

It'll include some investment banks. It'll include some lenders. It'll

some hedge funds.

People were drawn to him. The grandiose parties, the lavish lifestyle, as well

as the success in business and giving his money away to charity, it was

of that that people looked at Tom Petters and said, this is a legitimate

I'm going to give him some of my money.

Or a lot of it.

In the booming financial climate of the mid -2000s, Petters has no problem

securing hundreds of millions of dollars time and again.

mainly from high -rolling hedge funds.

Petters is promising 15 % to 20 % returns through his Petters Company,

PCI, which handles financing for his diverting deals.

Dave Phelps is a reporter for the Minneapolis Star Tribune.

Investors were led to believe that Petters Company, Inc. was buying

electronic goods, consumer electronic goods, at a discount.

and selling them to big box retailers like Costco or Sam's Club.

Although Petters has more than 3 ,000 employees,

PCI is made up of just a few people who have been with him for years, namely

Deanna Coleman, Petters' one -time secretary turned operations manager, and

White, PCI's treasurer.

And they've been keeping an incredible secret for more than 10 years.

The deals that Petters sells to his investors involving electronics

manufacturers, retailers, and warehouses are all fake.

There is no merchandise being bought or sold.

And there are no profits.

In fact, it's all a fraud.

So Petters would go out and he'd solicit money.

He'd bring it into his fraud machine, which was called Petters Company, Inc.

And then in that machine, then, wherever the money needed to go, it would go

out. There was over $41 billion worth of inter -corporate transfers.

Keeping track of who needs to get paid and when is a monumental task.

It falls to Deanna Coleman, Petter's longtime employee and trusted confidant.

Deanna Coleman was really Tom Petter's right -hand woman. She ran the

She was the brains and the guts of the whole thing.

Rounding out the three -person fraud unit is Bob White.

Technically a consultant for PCI, he's a one -man forgery department, churning

out a mind -boggling number of phony purchase orders, bank statements, and

documents in order to keep the scheme going.

He would spend hours, sometimes days at a time, with scissors, glue,

cutting, and pasting.

So that he could create an invoice or some sort of document that looked

legitimate to investors.

Bob White tells his son Chris that at its peak, the amount of money running

through the scheme is staggering.

There was new money that they had to come up with every month just to pay the

interest on the debt.

Not running businesses, not anything else, but just paying the interest on

debt. The new money that was needed was $115 million a month.

No one is sure when the fraud started exactly.

But Bob White says he became unwittingly involved as far back as 1999.

In this telephone interview, White tells American Greed that Petters sought his

help getting out of a deal that went south.

He was crying, help me get through this. And I did. We made up some documents

that looked like the money was arriving and he hadn't spent it improperly.

According to White, a month later, Petters tells him it's all taken care

as a thank you, drops off $15 ,000.

The following year, Petters hires Bob White to work at PCI, and White says

not long after that that Deanna Coleman tells him the truth about Petters'

promissory notes.

Something about the notes didn't seem right, and I asked Deanna.

I said, you know, something's not right about them.

what's going on, and she said they're all fake. She told me they were all

It added up to about $100 million of fake notes, and I had made up several

documents, and so I felt I was in the midst of a big

pontificate, and that's when I figured it out. I confronted Tom, and

he was pretty...

calm about it, and so is Deanna.

Deanna was saying that Tom will figure a way out of this.

Companies get to breaking points. That's how they get better.

Over the next 13 years, Petters goes on to build a corporate powerhouse, funded

in large part by his investors' principal, which he tells them is safe

locked account.

He pays fat returns on time, and few investors are asking any tough

As the scheme grows, he, White, and Coleman are bound ever tighter in a web

lies.

Tom was saying to people, I've got this fantastic deal you can share in the

profits and you'll make high interest rates on your money.

And so the debt would grow.

Next on American Greed, law enforcement has no idea what PCI is up to.

until Petter's girl, Friday, decides to save herself and take her boss down.

And she just lost faith in his ability to make things good.

Minnesota businessman Tom Petters appears to be at the top of his game.

Founder, CEO, and sole owner of Petters Group Worldwide, which reports $2 .3

billion in revenue in 2007.

He boasts ownership of 150 companies, including Polaroid and Sun Country

Airlines, and is a man whose sterling reputation helps bring in billions of

investment dollars from people around the world.

Tom Petters was...

He was charming.

He was very, very smart.

And he knew a lot of these people. Some of the people who invested with him were

family. They were friends.

They were investment companies and other investors who he had done business with

before. And I think he was just a really, really good salesman.

What Petters is selling to investors are promissory notes through his company

PCI, Petters Company, Inc.

guaranteeing high returns on deals involving the sale of discount

merchandise.

But at some point more than ten years ago, there stopped being any real

merchandise.

Petters and a small cadre of employees began forging documents and making up

deals. It's all a Ponzi scheme.

Petters knew that if you just paid people and paid them well and made them

good about it, they wouldn't ask a lot of questions and they wouldn't go off

doing a lot of due diligence.

Good evening. Between Friday and today, the Dow Jones Industrial Average has

swung up and down almost 1 ,300 points. That is until late 2007 when the U .S.

financial industry begins to collapse.

New money sources are drying up. On top of that, many investors want their

principal back.

Petters is not able to bring in the $115 million a month he needs to keep the

scheme going, and PCI cannot keep up with their payments.

People needed their money to pay off their creditors, and so they squeezed

Petters. Petters squeezed Deanna Coleman and White and the others to say, we've

got to get this money, we've got to get it in and do that. A hedge fund named

Acorn Capital has $273 million invested with Petters.

When they failed to receive a $10 million payment in August of 2008, Acorn

claiming they'd been defrauded.

Another hedge fund in for more than $1 billion demands an audit of PCI's books.

But there was definitely concern going on within the confines of PCI at that

time. They had no books to audit, and they were afraid that that would just

bring down the curtain.

totally on the operation if the auditors got in from this big hedge fund.

A fearful Deanna Coleman begins planning her exit strategy.

Coleman has made more than $14 million in bonuses over the past eight years and

is a key player in the fraud.

In August 2008, she walks into her attorney Alan Kaplan's office and lays

on the table.

What she did was begin to explain the fact that she was involved

in a $3 .6 billion scheme.

I realized immediately that this may well have been at that time the

largest Ponzi scheme ever in the history of the United States.

Kaplan contacts the U .S. Attorney's Office and tells them he has the

case of a lifetime.

But before he gives it up, he wants a deal for his client.

The deal was this, that they agreed that she would, under no

circumstances, be exposed to a prison sentence of more than five years if

she were to cooperate.

And she was fine with that. And shortly thereafter, she came in with a stack of

documents.

And explained the whole scam.

But federal prosecutors need more evidence.

And they need Coleman to get it.

They ask her to wear a hidden wire and go back to work the next day.

Business as usual.

And she agreed to do that. That was done both with the use of a wire.

And they have recording devices that essentially look like car key fobs that

capable of clearly recording up to eight hours of conversation.

Next, hear how a desperate Tom Petter's own words seal his fate.

I'm trying to figure out a way out because living the lie is worse than

anything.

On the morning of September 8, 2008, Tom Petters is about to have a meeting that

he hopes will save his life.

The CEO's $3 .5 billion empire is on the verge of collapse.

His decade -long Ponzi scheme about to be uncovered.

The financial climate was changing, and things were starting to fall apart on

Wall Street.

And for his investors...

they started to ask questions. And that was something that had never really

happened before.

But because of the uncertainty of what was happening in the worldwide and

national financial world, these investors wanted to know where their

And things were starting to unravel.

Ever the optimist.

Petters believes if he can close a deal with the hedge fund Fortress Capital by

getting it to invest $100 million immediately, he can hold off Judgment

It's what he's been doing for years.

But this time, his right hand and co -conspirator Deanna Coleman is no longer

Petters' side. This time, she's working with the feds and wearing a wire.

And I went in your office and I looked at your calendar.

Oh, it's just a meeting. I think I just put meeting out there.

Within the first few hours of recorded conversations, the wire reveals a CEO

drowning in self -delusion, who thinks he's even got the man upstairs working

for him.

See, the only thing that makes me believe that there is, like, some divine

intervention.

Seriously.

There's no possibility we could have got away with this for so long.

During the meeting with Fortress Capital, Petters details a proposal to

firm's money to purchase electronics and resell them to big box retailers like

Walmart and Costco, who have supposedly already provided purchase orders, or

POs, for the goods.

But the deal is entirely made up.

Does Fortress know that all these POs are fake?

No, they don't know they're fake.

They're not going to be looking at our POs. They're only looking at one thing.

That one thing? The 30 % or more in returns Petters is promising.

Coleman tells the FBI that she and Petters had been making similar

for at least 13 years.

And for 13 years, no one has figured it out.

But now, Petters is feeling the heat like never before.

He's spending an increasing amount of time in Las Vegas, racking up an

gambling debt estimated at $10 million.

And according to close sources, he has a drinking and drug problem.

Undercover FBI recordings reveal a man on the brink.

After two weeks of undercover operations

with Coleman, the U .S. attorney decides they have enough on Petters, and they

move in.

Petters was in Las Vegas.

And the head FBI agent, who was a woman from here in Minneapolis, knocked on his

door at the Bellagio at 6 o 'clock in the morning and talked to him and

tried to get him to confess.

Back in Minnesota, dozens of federal agents are executing an early morning

on the headquarters of Petters Group Worldwide.

They had Deanna's road map.

She told them where to go, what records to look for, and so they hauled out box

after box after box, bank records, accounting records, all kinds of things.

News of the Petters' raid spreads fast.

When individual investor Doug Van Dyke finds out, he's stunned.

I guess the one word that would characterize how I felt was panic,

sheer panic.

Over the next couple of weeks, Van Dyke learns that all of his money, several

hundred thousand dollars that he had saved over his 30 -year career for

retirement, is gone.

I didn't know if I was going to be able to survive.

To try to absorb the enormity of this amount of money

that we had invested that was gone was incomprehensible to me. I

couldn't even begin to process it.

Meanwhile, in the days after the raid, Tom Petters returns to Minnesota and

holds up in his mansion on the lake.

He is not under arrest, but expects to be any day, and begins talking about

to ditch the feds with co -conspirator Bob White.

What Petters doesn't know is that the FBI is listening.

Petters is referencing the commodities trader who skipped the country after

being charged with insider trading and was later pardoned by President Bill

Clinton. Another core value in this company is humility.

Next on American Greed, the FBI is closing in on Petters and believes he is

making plans to escape.

Will agents catch him before he pleads?

The plan was that Tom was going to...

Give me a bunch of money, and I was supposed to sail his boat down to meet

later in the Caribbean.

On October 3rd, 2008, the FBI moves in on Minnesota businessman Tom Petters.

Suspected of running a Ponzi scheme for 13 years.

Agents have recorded Petters talking about fugitive financier Mark Rich.

The reference to Rich suggested to federal authorities that Petters himself

considering leaving the country.

Petters also discusses an escape to a Caribbean island with his co

But it wasn't meant to be.

Because he's deemed a flight risk, Petters is taken into custody at his $8

million Lake Minnetonka mansion and held without bail.

A year later, the trial of Tom Petters opens at the St. Paul Federal

He faces 20 counts of wire and mail fraud, conspiracy, and money laundering.

It wasn't just charges of fraud, money laundering, and conspiracy.

The amount of money...

That was involved, I think, floored everyone.

Three and a half billion dollars.

That's billion with a B.

Petters' former secretary turned operations manager Deanna Coleman blew

whistle on the operation after participating in the fraud.

She had cut a deal with the feds in order to net the big fish, Tom Petters.

Now, the once high -rolling CEO could face life in prison.

It was not easy for her, but in spite of that, she was ready, willing, and able

to continue her cooperation with the government.

Prosecutors played the tapes Coleman recorded of conversations with Petters

September 2008, in the days before the FBI raided his operation.

We're going to come up with some story.

I'm trying as hard as I can to figure out how to get out of this.

In testimony that stunned the courtroom, former PCI officer Bob White testifies

that he forged more than 10 ,000 documents over a nine -year period to

scheme going.

He was the wow witness.

Wow in the sense of that's really how it happened. That's really how we came to

have a $3 .5 billion Ponzi scheme cut and paste.

Petters' attorney John Hopeman acknowledges the fraud, but tells jurors

alleged scheme took place at a time when Petters was grieving the loss of his

son, who was stabbed to death during a study abroad trip to Italy in 2004, and

that Deanna Coleman and Bob White were the ones responsible for the fraud.

This was the guy who let things get away from him, and he trusted the people

around him.

to do things properly, and to make them work, and they failed him.

But the government says that the fraud far predates John T. Petter's death, and

that it's Tom Petter's own words that are perhaps the most damaging evidence.

This is one big fraud, and that's where it is, and that's how they're dealing

with it.

On December 2, 2009, after five days of deliberations, the jury finds Petter's

guilty on all 20 counts.

Four months later, a judge sentences him to 50 years in federal prison.

Deanna Coleman serves a one -year sentence and is released from prison in

2011.

Bob White is sentenced to five years.

At least eight other Petters Associates have been convicted of money laundering

and fraud, including five hedge fund managers.

But not everyone is happy with the outcome.

Tom Petters' friend and former salesman, Harold Simmons, believes that Petters

is innocent and his sentence of 50 years is unfair.

Deanna Coleman gets a year.

Bob White gets five years.

Where's the justice in this?

It's just not there.

Tom's got a heart as big as Alabama.

I'm not saying Tom didn't do some shady deals over the years to keep companies

up and going and running, but Tom didn't do this.

I'm just telling you.

A judge appoints attorney Doug Kelly as receiver for the case.

He's selling off assets, trying to recoup losses.

And he's recovered more than $200 million so far, including more than $8

from Deanna Coleman and Bob White.

But the big money, according to Kelly, is tied up in what's known as clawback,

the recovery of some $2 billion from people who are considered net winners in

their dealings with Petters.

One of the harder parts of my job has been charitable contributions.

So I've had to call all these presidents of these colleges and schools and other

things and say, I'm really sorry to do this, but this money was not Mr.

Petter's money to give.

It was all stolen money that he stole from other people. I hope you'll send me

check back.

And most of them did.

For Doug Van Dyke, who lost all of his retirement savings,

the Petters scam has been life -altering.

After being retired for seven years, he is forced to go to his former company

and ask for his job back.

The thing you need to know is that I have flunked retirement 101, and I need

come back to work if you'll have me. If not, then I've got to go somewhere else.

And fortunately, they wanted me back.

He and his wife now live in this small apartment near his office.

They sold their Florida condo at a big loss.

And they're struggling to hold on to their lakeside dream home where they

that one day they might possibly be able to retire for good.

Meanwhile, Tom Petters is serving his time at Leavenworth Prison in Kansas.

He is appealing his conviction and maintains his innocence.

Petters' story is a little...

insight into our own psyche.

There are a lot of folks here who turned their backs on questions they should

have asked, turned their backs on people they should have pushed for due

diligence, and the reason they turned their backs was because they were making

so much money. And I think that's really sad because Petters wasn't really that

smart. He wasn't really that good a businessman, but he was a damn good