Updated: 10/21/2009 6:18 PM KSTP.com | Print |  Email
By: Becky Nahm & Tom Hauser

Jury Selection to Begin Monday in Petters Trial

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With time running out before the start of the Tom Petters criminal trial, his lawyers made moves to keep evidence of their clients lavish lifestyle out of court, to get access to more information about an alleged co-conspirator and, once again, to move the trial.

Wednesday attorneys defending Wayzata businessman Petters against charges of fraud filed 28 pretrial motions. In one they renewed their motion for a change of venue due to the possibility of pre-trial publicity tainting the jury pool.

Judge Richard Kyle denied the motion and said he would only reconsider his decision if something unusual comes up during jury selection, now scheduled to begin on Monday.

Kyle granted a defense motion to exclude details of Petters' lavish lifestyle and spending along with accusations of drug and prostitution use. The defense argued such evidence would become a side show and distract from the actual legal case.

The judge left open the possibility for the prosecution to ask for another ruling on the lifestyle issues.

The judge did not yet rule on a motion from the prosecution to disallow evidence of Petters' former charitable giving. However the judge did shoot down the defense argument that the evidence speaks to Petters' character. Judge Kyle compared the argument to a bank robber who gives the money he stole to the "Little Sisters of the Poor." He said it doesn't change the fact the money was stolen.

Also among the 28 defense motions was a request for more access to documents about defendant Larry Reynolds. Reynolds is the alleged co-conspirator who used to be in the Federal Witness Protection Program. The defense said proving he helped set up Petters is a big part of their defense. Prosecutors said the argument is just a "red herring" and that Petters attorneys want to turn this into a trial about the witness protection program. The judge took the motion under advisement and will issue a ruling later.

In another ruling, the judge agreed with the defense argument to exclude evidence of past allegations of criminal business dealings from Colorado in the late 1980s. The ruling will likely restrict the prosecution to Petters' dealings from 1994 through 2008. However, the judge decided to allow evidence of past tax and bank fraud.

The defense also made a motion to transfer Petters from the Sherburne County Jail to the Ramsey County Jail. The attorneys said it takes them an hour to get to the Sherburne jail to talk to their client. The judge said he will look into it, but said security issues, expense and available space might prevent a transfer.

For now, the judge said he will ask the U.S. Marshals Service to allow Petters to be brought in to court as early, and allowed to stay as late, as he needs each day of the trial.

Jury selection was initially scheduled to start Thursday, Oct. 22, but the judge postponed it until Monday morning. Judge Kyle said he thinks the court will be able to seat a jury by early afternoon. Jurors can come from anywhere in Minnesota.

Opening statements could happen as early as Monday afternoon, but it's more likely they will begin Tuesday morning.

Whistleblower Deanna Coleman is scheduled to testify.

Petters, the founder and former CEO of Petters Group Worldwide, is accused of running a $3.5 billion Ponzi scheme involving fake purchases of electronics equipment.

Petters was indicted on 20 counts. He pleaded not guilty.