Jailed Ponzi scheme leader Petters due in court to seek lesser sentence

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Former Wayzata businessman Tom Petters is due back in federal court in St. Paul this week in a last-chance effort to secure a lighter sentence.

Petters, 56, is currently serving a 50-year prison sentence at Fort Leavenworth, Kan., after being convicted in 2009 of running a $3.65 billion Ponzi scheme that lasted a decade. It was believed to be the second-largest swindle of its kind, second only to that of Bernie Madoff.

Petters' lawyer Steve Meshbesher has said Petters deserves a hearing to challenge the sentence because his client was not told about an offer for a 30-year sentence until after his conviction.

“Defendant Petters affirms that the very first time the 30-year cap was ever raised was during a meeting in the U.S. marshal’s holding cell immediately following his trial and conviction,” Meshbesher wrote in a brief last summer.

Petters' attorneys plan to argue that their client would have taken the plea deal if only he had known about it, so at issue is whether a legitimate offer was made by federal prosecutors, whether Petters' then-attorneys told him about it, and whether he had a real opportunity to take it, the Star Tribune reports.

Petters' appeals have been exhausted, so this amounts to a last-ditch effort to get a lighter sentence, the newspaper notes.

Two Petters associates were recently sentenced for their part in the Ponzi scheme. Frank Vennes last week was sentenced to 15 years, the maximum sentence allowed by a plea deal he struck with prosecutors.

James Fry, a Minnetonka hedge fund manager, earlier this month was sentenced to 17.5 years in federal prison.

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