Petters insists associates hid fraud in cross examination

ST. PAUL, Minn. -- Prosecutors have spent a year putting together their case against Tom Petters. They've no doubt talked to his attorneys many times.

On Thursday, prosecutors finally had a chance to ask Petters himself whether he committed the fraud they've accused him of.

Prosecutor Joe Dixon asked, "You claim that Ms. Coleman...hid this from you for 15 years?"

Petters answered, "I am claiming that I knew nothing of the fraud for 15 years."

During his testimony, Petters often pointed the finger at his top executives Deanna Coleman and Bob White, suggesting that while he was chief executive, they were in charge.

Dixon showed how close Petters and Coleman were, even intimate, suggesting that hiding the fraud from Petters would have been impossible. He played an excerpt from a secret FBI recording.

Coleman is on the phone with Petters asking for signatures on some documents.

Petters says, "Come on over. Jump in bed with me...take a nap."

Dixon also asked, "You couldn't have real people running Petters Company Inc. Because they would have discovered the fraud?"

Petters answered, "That would have been good."

At times, the exchange between Dixon and Petters was heated and Petters answers were sometimes confusing, often not answering directly.

Petters asked several times, "What did I say yesterday?" referring to his previous testimony.

Petters was also trying to distinguish between fraudulent documents and fake documents, saying he knew some purchase orders his company created were false, but he told the jury that's the way it was done in the liquidation business - an attempt to hide the identity of a supplier from investors so Petters didn't get cut out of the deal.

When Dixon asked whether Petters lied to investors.

He told the court, "Anything is possible."

Earlier, under questioning from his own attorney, Petters tried to explain what sounded like incriminating statements he made during the secret recordings.

He told the court, "Listening to myself, I sounded like a maniac."

Attorney Jon Hopeman asked, "Did you believe you were obeying the law?"

Petters answered, "Absolutely."

Part of the prosecution's strategy Thursday was to throw Petters off, shake his story and the strategy appeared to work, at least in part.

While Petters continued to say that he did not commit the fraud, he said he had many suspicions, but didn't do anything about them. Petters admitted that at times, his company used new investor's money to pay off old investors.

Closing arguments are expected Friday.  Hopeman says he expects to rest his case early Friday.  Prosecutors may call a rebuttal witness, but both sides are expect final summations to begin before the day is out.

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