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Petters associate James Fry gets 17 years in prison

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A Minnetonka hedge fund manager and associate of Tom Petters was sentenced Wednesday to 17.5 years in federal prison, the Pioneer Press reports.

Fry, 59, was found guilty this summer on 12 counts of fraud and making false statements to the Securities and Exchange Commission.

Prosecutors recommended a 25-year sentence while Fry's attorney, Joe Friedberg, requested he should get six years or less.

The charges stemmed from Petters' $3.5 billion Ponzi scheme, the largest financial fraud in Minnesota history.

Fry ran Arrowhead Capital Management, which invested with Petters for a decade. The receiver in the Petters bankruptcy sought $105 million in "false profits" from the hedge fund.

Fry maintains he never knew that Petters was involved in fraudulent activity, the Star Tribune said.

The Pioneer Press points out that Fry was the only defendant connected to the case, besides Petters, to plead not guilty.

Petters was convicted in 2010 and is serving a 50-year sentence at Fort Leavenworth, Kan. He is expected to return to Minnesota next week to argue for a reduced sentence.

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