U.S. says Petters faked checks, orders in Ponzi scheme
Tom Petters concocted fake checks and purchase orders as part of a Ponzi scheme to deceive retailers into believing that he was transacting more business with them than he actually was, the U.S. government said at his trial on Thursday.
With Petters looking on at the first full day of testimony into his alleged $3.65 billion fraud, prosecutors questioned several witnesses, introducing what they called evidence of bogus transactions involving Costco Wholesale Corp and General Electric Co's GE Capital unit.
GE Capital executives testified how the lender extended a $50 million line of credit to one of Petters' companies, before confronting the Minnesota businessman about documentation for some Costco transactions. One said Petters became irritated when asked to repay $45 million that had been drawn down.
"Tom Petters called me and read me the riot act," said GE Capital risk executive Paul Feehan. "He gave me a butt-kicking. He was adamant that I stay the hell away from Costco."
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