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Whistleblower Sentenced in Petters Fraud Case

A whistleblower who provided extensive audio evidence to federal prosecutors in a criminal case that enabled them to convict Tom Petters, CEO of Petters Group Worldwide, of fraud in a $3.5 billion Ponzi scheme was sentenced on September 2 to one year and one day in prison.

Deanna Coleman was a confidante of Petters for 15 years and served as an operational manager of the Minnesota-based company at its highest levels. At the time she went to the FBI in autumn 2008, the fraud was the largest in U.S. history.

Prosecutors called Coleman's 16 days of secretly taped conversations at Petters Group Worldwide "quite possibly the most significant cooperation ever provided to law enforcement in a fraud case."
 
U.S. District Judge Richard Kyle stated that the seriousness of Coleman's crimes spanning the fraud heavily influenced his decision to give her prison time. "It wasn't an easy day for me," he said, in acknowledging that Coleman's stepping forth and cooperating with the government was the main catalyst in stopping the fraud. Kyle stated that the sentence was the result of offsetting Coleman's cooperation "with what you did before you came to the government."

Prosecutors called it "a fair sentence." Third-party legal experts also weighed in to state that, despite the whistleblowing activity resulting in a prison term for Coleman, the outcome could still encourage other whisteblowers to come forward. The sentence "seems like a huge break," said Ted Sampsell-Jones, a professor at William Mitchell College of Law, noting that Coleman would likely have received many years in prison had she not cooperated.

With good behavior, Coleman could end up serving only about 10 months. Petters received a 50-year prison term for his role as author of the Ponzi scheme.

Related Resource: www.pioneerpress.com "Petters' whistle-blower sentenced to a year in prison" September 3, 2010

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