This is the summary of the Ponzi Scheme entitled “Fraudulent Scheme of Tom Petters”.
Background
Let me first give you a brief history of Tom Petters started his name in business. Thomas Jefferson Petters or more popularly known as Tom Petters was born on July 11, 1957. He was a business-minded person at a young age. He started a small electronics company in high school; and dropped out of college to pursue a career in Colorado. Petters founded Amicus trading in 1988, a wholesale brokerage company that was later changed to Petters Company that marketed consumer merchandise. In 1995, he started Petters warehouse direct that focused on selling and re-selling closeout, overstock and bankrupt company merchandise from a store in his home town Minnetonka, Minnesota. After 3 years, he ventured into online selling through redtag.com that sells discounted merchandise and by year 2000, he sold his warehouse direct stores to focus on his businesses online. His “business” grew and managed to acquire Polaroid brand in 2005 and Sun County Airlines in 2006. Petters Group worldwide became a diverse holding company with USD2.3 billion dollars in revenue by 2007. However, his success was short-lived, because in late 2009, he was sentenced 50 years imprisonment for being the mastermind of a USD3.65 billion Ponzi scheme. The third largest of its kind behind, Madoff’s and Stanford’s.
Essay Objectives
The objective of this case is to illustrate how the unethical behavior of Tom Petters violated the trust of investors. This discussion will also show how it is possible for an individual with a very good public image betray the trust of investors through a Ponzi scheme. This summary will also explain how investors have been blinded by success stories, and fooled by an elaborate way of milking money from unwitting investors.
See you on the second part.