Petters trial: Business tycoon tells of trouble dealing with Petters

ST. PAUL, Minn. -- He's a prominent Minnesota businessman, founder of Genmar and other large companies, and has now testified at the trial of another prominent Minnesota businessman.

But Irwin Jacobs says he does business differently than Tom Petters.

"I was always puzzled by his instantaneous growth," Jacobs told reporters.

At Petters' federal fraud trial, Jacobs told the court he sold retail stores to Petters in the late 1990s.

The financial arrangement was a kind of loan that Petters would repay. When payments were late, Jacobs threatened to foreclose.

He testified, Petters told him, "frankly I'm broke and you wouldn't get me if you came after me."

Petters later approached Jacobs about another business venture, allegedly asking Jacobs to create a false invoice to help Petters get financing. Jacobs told him, "We don't want any part of being a crook in this transaction."

"The bottom line, I said 'Tom, we will do no business with you. We have no interest in bringing phony invoices'," Jacobs told reporters after his testimony.

On cross examination, defense attorney Jon Hopeman asked Jacobs about the initial deal with Petters. Hopeman asked, "Ultimately he paid everything including interest?"

Jacobs answered, "Yes."

Ted Deikel also took the stand. He is another heavy hitter in the business world. He bought Fingerhut with Tom Petters and the two were close friends.

Deikel testified that in 2008 Petters asked him to invest in electronics merchandise to be sold at a profit.

Prosecutors have argued Petters brought in many investors this way, but the electronics didn't exist.

Deikel invested $10 million, and to this day has only been re-paid a fraction.

The defense questioned Deikel about his friendship with Petters. Paul Engh asked, "You treasured the friendship did you not?"

Deikel answered, "Tom was a good friend."

"This was a painful day because I've spent a year trying to reconcile the person I thought I knew as a friend with the person I've been reading about for a year," Deikel told reporters after he testified.

The prosecution ended the day with testimony from an IRS agent who traced Petters money - where it came from where it went. Prosecutors tell KARE 11 they may rest their case on Monday and the defense will start. Petters' attorneys say no decision has been made yet about whether Petters himself will take the stand.

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