Closing arguments in Petters trial expected Friday

Closing arguments are expected Friday in the fraud trial of Minnesota businessman Tom Petters.

Petters faced a scorching cross examination Thursday in his second full day on the stand.

Prosecutor Joe Dixon berated Petters, who decided to testify in his own defense. During questioning, Dixon charged Petters was willing to lie and cheat to make himself into a corporate tycoon. Dixon said Petters let inexperienced, unqualified cronies run PCI because "real business people" would have discovered the fraud there.

Dixon also said Petters cheated on his taxes, failing to report millions of dollars in income. Dixon asked Petters if his tax returns fairly represented his income. Petters said, "I don't know."

Petters continued to insist he is not responsible for a massive Ponzi scheme carried out at Petters Co Inc. He argues employees and business associates perpetrated the $3.5 billion fraud behind his back.

Petters told Dixon he was unaware of a fraud at PCI until he was told of it by former employee Deanna Coleman. Petters said Coleman was responsible for running the company. Coleman, however, said Petters masterminded the fraud, and has testified against Petters for the prosecution.

Prosecutor Joe Dixon dismissed as ridiculous Petters' contention that Coleman could conceal a fraud at PCI from Petters. He noted that Petters said Coleman was a very close and trusted friend.

"You had the closest of closest relationships and she hid a fraud from you for 15 years?" Dixon asked in disbelief.

"Yes," Petters responded.

Dixon told the court Coleman and Petters were lovers for nearly a year and a half. Petters denied the affair lasted very long.

But Dixon then played a secret tape recording Coleman made of Petters in 2008. In the tape, Coleman is on the phone talking to Petters at his home about signing some documents when Petters suggests that Coleman "come over [to his house] and jump in bed with me." He adds he is naked.

Dixon tried to corner Petters repeatedly with what appear to be incriminating statements Petters made in secretly recorded conversations. But Petters typically would try to explain them away as being taken out of context.

Petters' responses to Dixon got pretty flippant at times. Asked if it were possible he lied about meeting with Costco executives, Petters said "anything is possible."

Dixon ticked off a list of people Petters blames for the fraud. but noted Petters brought them all together.

Petters said he "sure did."

"They were your instruments," said Dixon.

"Yeah, they were my instruments," Petters said sarcastically.

Defense attorney Jon Hopeman said he expects to rest his case on Friday. Prosecutors may call a rebuttal witness, but both sides expect to begin final arguments before the day is out.