Stay Curious. Stay Connected.
MailNewsletters♡Donate Now
Sign up
*Password must be at least 8 characters and contain one uppercase letter, one lowercase letter, one number and one symbol.
Already have an account?
By submitting, you consent that you are at least 18 years of age and to receive information about MPR's or APMG entities' programs and offerings. The personally identifying information you provide will not be sold, shared, or used for purposes other than to communicate with you about MPR, APMG entities, and its sponsors. You may opt-out at any time clicking the unsubscribe link at the bottom of any email communication. View our Privacy Policy.
Sign in to your profile
Forgot Password?
New to MPR News?
Welcome back
to news
for you
Reset Password

Enter the username on file and we'll send you a code to reset your password.

Still require assistance or not sure what your User Name is?
Welcome back
to news
for you
Email Verification

A verification code has been emailed to

Still awaiting the code?
Martin Moylan
St. Paul, Minn.

Two business leaders take stand in Petters trial

Go Deeper.

Create an account or log in to save stories.

Log inCreate a free Account

Like this?

Thanks for liking this story! We have added it to a list of your favorite stories.

Show me!

Jurors in the fraud trial of Tom Petters heard damaging testimony Friday from two prominent business leaders who did business with Petters.

Irwin Jacobs, a prominent Twin cities business leader for decades, told jurors Petters once asked him to inflate the value of an invoice. Jacobs said Petters was hoping to convince lenders or investors to give Petters more money. Jacobs refused , saying he wasn't going to become a crook. Jacobs said Petters described himself as broke when he was late in paying for some retail stores Jacobs sold to Petters in the late '90s, but Jacobs was eventually paid.

Petters' role in helping to rescue the catalog retailer Fingerhut, which at one time employed 4,700 workers in Minnesota, helped catapult him to prominence in Minnesota. Fingerhut was slated for closure by its parent company in 2002.

Petters teamed up with former Fingerhut CEO Ted Deikel to take over the operation and try to revive it.

On the stand Friday, Deikel said he once had great trust in Petters.

"He was a good friend," Deikel said.

But that was before Deikel lost $7.5 million in Petters' alleged scheme.

Petters defense attorney Paul Engh noted that Deikel was expecting a very fat return on the money he invested with Petters. Petter was to pay Deikel 10 percent interest over two months. Engh noted that was an annualized interest rate of 60 percent.

An IRS agent said there was a clear pattern of investors' money being diverted to Petters and his companies. She reviewed bank statements to show how new investor money was used to pay off prior investors.

Petters is accused of leading a Ponzi scheme that ripped off investors for about $3.5 billion.

Investors thought they were financing the buying and selling of consumer electronics. But federal prosecutors say the goods didn't exist and the money went to pay off other investors and help fund Petters' lavish lifestyle.

Federal prosecutors are expected to wrap up their case Monday.

Petters' defense attorneys say no decision has yet been made about Petters taking the stand in his own defense.