Petters, on witness stand, denies knowing of fraud

Businessman Tom Petters took the stand in federal court today Tuesday in an effort to defend himself against fraud charges.

The former owner of Sun Country airlines and Polaroid is charged with cheating his investors out of $3.5 billion.

Petters' defense attorneys called him after they had put about a dozen defense witnesses on the stand.

On the stand, Tom Petters said he regretted what happened with his business. He said he trusted some people too much, but he did not knowingly participate in fraud. Petters insisted he's not guilty of the 20 wire fraud, mail fraud, conspiracy and money-laundering charges against him.

Petters also apologized to his former employees and their families, to his own family and to investors who lost money in the alleged Ponzi scheme.

Investors thought their money was being used to buy TVs and other electronics and sell them at a profit to big retailers like Sam's Club. But the merchandise didn't exist and the sales were a sham. Money from new investors was used to pay prior investors.

During his testimony, Petters appeared calm and relaxed. He was articulate, as he began to chronicle his business career. Even the prosecution acknowledges Petters is a skilled salesman, and this is the sales job of his life.

Jurors have heard from a half-dozen former Petters' employees or business associates who pleaded guilty to participating in a fraud involving a Petters firm that ostensibly financed the buying and selling of billions of dollars worth of phantom consumer electronics.

Those witnesses who've cut deals with the government are hoping to receive reduced sentences for their testimony.

Many of their conversations with Petters were secretly recorded and have been played for jurors. Petters, it would seem, is likely the only person heard on those recordings who can present his side of those conversations.

Petters said he wasn't involved much in the business that financed consumer electronics deals. He said he turned its operations over to Deanna Coleman and other people.

Coleman was the government's lead witness against Petters. She went to federal prosecutors in September 2008 and exposed the Ponzi scheme and insists Petters led the fraud.

It's unclear how much longer Petters' attorneys will keep him on the stand, but Petters will face an intense grilling from prosecutors when they get their shot at him.