A tearful Tom Petters admits guilt, pleads for lighter sentence

A tearful Tom Petters pleaded to a federal judge for forgiveness Wednesday morning, attempting to get a reduced prison sentence for leading the biggest business fraud in Minnesota history.

Petters asked U.S. District Judge Richard Kyle to replace his current 50-year prison sentence with one that carries a maximum of 30 years.

"I've come full circle in my life back to where I was when I grew up in St. Cloud," Petters said, speaking directly to Judge Kyle.

"Maybe I thought the world revolved around me. But I lost my way big time. I am sorry I lied in your courtroom. It's a horrible excuse, but I lied. And I am begging for forgiveness today.''

Petters, 56, said he would have taken a plea offer of 30 years back in 2009 before his trial.

"I would have taken the 30-year cap if I had known that I did not have to go to trial, as God as my witness,'' Petters testified. He is currently four years into the 50-year sentence.

The hearing came to a close late Wednesday with testimony from Petters's original defense team, all three of whom said the Wayzata businessman was told more than once of a possible plea deal.

Judge Kyle did not immediately rule on Petters's motion for a new sentencing and gave attorneys until Nov. 5 to file their final briefs on the matter.

Petters, wearing an orange prison jumpsuit over a white T-shirt, was subdued as he testified that his defense attorneys never told him about a possible plea agreement until after he was convicted.

In an exchange with his current lawyer Steven Meshbesher, Petters was asked: "If you had known of the offer would you have accepted it?''

Petters: "Yes I absolutely would have.''

Meshbesher: "Would you have pleaded guilty?''

Petters: "Yes.''

Meshbesher: "Are you guilty?''

Petters: "Yes.''

Under questioning by acting U.S. Attorney John Marti, Petters repeatedly insisted that he lied during his 2009 trial when he denied his guilt.

"I wanted to come in here and right the wrongs,'' Petters said.

Marti: "You lied because you were scared, you lied because you didn't want to spend your life in prison?''

Petters: "I lied, yes.''

Marti asked Petters if he purchased Sun Country Airlines with stolen money.

Petters: "At the end of the day, I guess we did.''

Marti: "We did?''

Petters: "I did, I did.''

In court documents filed earlier this year, Petters' current lawyer, Meshbesher, said that Petters was unaware that federal prosecutors were willing to offer him a prison sentence with a 30-year cap in exchange for a guilty plea as early as 2008, shortly after he was arrested for his role in a $3.65 billion Ponzi scheme.

But Petters's defense attorneys from that time asserted that Petters was unwilling to plead guilty. In afternoon testimony Wednesday, one of the former defense attorneys, Jon Hopeman, said "it is not true'' when Petters says he was not informed of a possible plea deal.

Petters currently is serving his prison term in the federal facility in Leavenworth, Kan. for his conviction on charges of fraud, money laundering and conspiracy. At the time of his September 2008 arrest, Petters and several cohorts were involved in a scheme that involved raising funds from investors for the purported purpose of purchasing consumer electronic goods from manufacturers for resale to big box retailers at a profit. However, no goods existed and the scheme involved the transfer of funds from new investors to pay off old investors and to expand Petters' business interests.

At one time, the Petters corporate portfolio included Sun Country Airlines, Polaroid and Fingerhut, as well as a chain of discount stores and Internet companies.

David Phelps • 612-673-7269