Three Petters associates sentenced for ponzi scheme roles


The final three people with ties to the Tom Petters Ponzi scheme were sentenced on Friday.

Bruce Prevost and David Harrold of Palm Beach Capital Investments and Michelle Palm of Arrowhead Capital management in Minnetonka were all sentenced on Friday.

The Pioneer Press reports that Prevost was sentenced to 7 1/2 years in federal prison, while Harrold received a five-year sentence.

Investors in Palm Beach Capital Management took about one-third of the total losses in the Petters scam. Both pleaded guilty to four counts of securities fraud.

Palm dodged prison time and received three years probation. She pleaded guilty to providing false information to investors and making false statements to the SEC.

Her testimony previously helped convict Arrowhead founder, James Fry on fraud charges related to the scheme. Fry was sentenced to 17 1/2 years in prison last month.

Petters, 56, is currently serving a 50-year sentence at a federal facility in Fort Leavenworth, Kan. for running a $3.65 billion Ponzi scheme, the largest financial fraud in Minnesota history. He'll be eligible for release in 38 years.

He recently returned to U.S. District Court in St. Paul to request a reduced sentence.

After more than five years, Friday's sentencing hearings wrap up the criminal cases related to the Petters' scheme. Federal authorities raided the headquarters of Petters Group Worldwide and the homes of top company executives on Sept. 24, 2008.

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