Lieff Cabraser is investigating an alleged $3 billion fraud perpetrated by Thomas J. Petters ("Petters") and the companies he ran, including Petters Group Worldwide, LLC ("PGW") and Petters Co., Inc. ("PCI").
On October 2, 2008, the United States Attorney for the District of Minnesota criminally charged Petters and a business associate with operating a massive Ponzi scheme perpetrated on unsuspecting investors since the mid-1990's. According to the complaint filed by the United States Attorney, Petters and others fraudulently induced investors to invest billions of dollars in PGW and PCI by falsely representing that the funds would be used to purchase consumer electronics and other merchandise that the companies would later resell at a profit to retailers. In many instances, investors were allegedly provided promissory notes secured by either merchandise purportedly purchased by PCI or fictitious accounts receivables. Petters and his affiliates, however, allegedly did not purchase any merchandise with the money they raised, but rather, used the money for Petters's other business ventures and to support his extravagant lifestyle.
On December 1, 2008, a federal grand jury returned a 20-count indictment charging Petters with wire and mail fraud, conspiracy and money laundering in connection with the alleged Ponzi scheme. The indictment also charged PCI and PGW in all but eight counts of money laundering.
On July 7, 2009, the Securities and Exchange Commission ("SEC") charged Petters and hedge fund manager, Gregory M. Bell, and Bell's investment advisory firm, Lancelot Investment Management LLC, with violations of federal securities laws. According to the SEC's allegations, Bell facilitated Petters's fraudulent scheme by selling interests in three Lancelot "feeder funds" to investors and then using approximately $2.62 billion in the money it raised to invest in notes issued by PCI. The SEC also obtained a court order freezing the assets of Bell and Lancelot Investment Management.
As of now, a court-appointed receiver is sifting through the records of Petters and his companies to determine what (if any) assets remain to satisfy investors' claims.
The list of investors that were affected by this massive fraud is growing every day. Apart from the numerous investors who entrusted their money directly with Petters's companies, a growing number of investors are finding that investments they had made with various investment funds (including hedge funds) were in fact invested with Petters, and are thus at risk.
In addition to the investment funds offered by Lancelot Investment Management, some of the more notable examples include funds offered by Palm Beach Capital Management LLC, Gottex Fund Management Holdings Ltd., Acorn Capital Group LLC, and Ritchie Capital Management, LLC, though this list is not exhaustive. Investors in such instances may have potential causes of action against the fund managers or intermediaries who either recommended or invested their clients' funds in Petters's companies.
Contact Lieff Cabraser
Investors that have suffered losses as a result of the alleged Ponzi scheme perpetrated by Thomas J. Petters are welcome to contact Lieff Cabraser for a confidential review of their claims without charge or obligation.
Please click here to contact a Lieff Cabraser financial fraud attorney or call Sharon Lee in San Francisco at 800-541-7358.
Note to Employees and Participants in Retirement Plans that Invested in the Petters Ponzi Scheme
The Employee Retirement Income Security Act of 1974 ("ERISA") imposes obligations on employers and others who control investment decisions of a pension plan. Employees or pension plan beneficiaries whose pension plans suffered losses due to the Petters Ponzi scheme are welcome to contact Lieff Cabraser to learn more about their rights under ERISA without charge or obligation.
About Lieff Cabraser
Described by The American Lawyer as "one of the nation's premier plaintiffs' firms," Lieff Cabraser Heimann & Bernstein, LLP, is a 50-plus attorney, AV-rated law firm with offices in San Francisco, New York, and Nashville. Since 2003, The National Law Journal has selected Lieff Cabraser as one of the top plaintiffs' law firms in the nation. In compiling the list, the Journal examined recent verdicts and settlements in addition to overall track records. Lieff Cabraser is one of only two plaintiffs' law firms in the United States to receive this honor for the last six consecutive years.
Lieff Cabraser possesses an impressive track record of successfully representing high-wealth individuals and other investors in securities and financial fraud cases, including cases arising out of Ponzi and other fraudulent schemes. Learn more about our firm.
