Judge Freezes Assets in $3B Fraud Investigation

     MINNEAPOLIS (CN) – A federal judge froze the assets of former Petters Group CEO Tom Petters, his companies and all affiliates during the investigation of a $3 billion fraud scheme.




     U.S. District Judge Ann Montgomery said there is “probable cause to believe” that certain Petters defendants committed federal mail, wire and banking fraud.
     Montgomery granted receiver Douglas A. Kelley “immediate access to inspect or copy any records or other documentation” owned or controlled by the former executive, Petters Company Inc., Petters Group Worldwide and any affiliates, subsidiaries, divisions or successors.
     The asset freeze applied to the same Petters companies and affiliates, but excluded Thomas Petters Inc. and its subsidiaries, which include Sun Country Airlines.
     The freeze prohibits the defendants from withdrawing, transferring, altering or concealing assets, or opening safe deposit boxes. All assets are now property of the receiver and subject to his administration.
     The preliminary injunction forces third-party asset holders to freeze control of all activities except those Kelley directs, and provide any requested documentation.
     Kelley is also responsible for keeping the defendants’ ongoing business operations running smoothly during the investigation. His out-of-pocket expenses will be covered by the defendants’ assets.
     

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