The woman who went undercover to expose an alleged fraud that prosecutors say was perpetrated by Wayzata businessman Tom Petters took the stand Monday.

Deanna Coleman testified about going to federal prosecutors in September 2008 to blow the whistle on an alleged $3.65 billion Ponzi scheme. After Coleman talked to prosecutors, she returned to Petters' headquarters wearing a wire.

Her testimony and the recordings appeared to show Petters was struggling to find new money and hold off nervous investors.

Coleman said, "Sometimes we'd use the investor's money to pay off the investor himself."

In one recording, jurors heard Petters crying telling Coleman, "Sorry, Sorry you ever had to meet me."

In that same recording he moved to give her a hug. She backed off, complaining about a bad back. But in reality she was wearing a secret recording device on her back.

In another recording, Petters appeared to make light of potential legal problems.

He said, "We'll have to move out of the country anyway."

During Coleman's testimony, Assistant U.S. attorney Joe Dixon presented a pattern of fabricated documents, purchase orders and invoices.

The prosecutors picked through more than 2,200 emails between Petters and Coleman.

In one exchange, after Coleman had allegedly created a batch of fake purchase orders on a bogus shipment of Playstation 3 machines, Petters wrote, "I love you. U R the only one who gets it."

During her testimony, Coleman never turned her head to see Petters.

The closest the two came to each other was during the morning and afternoon breaks. As Coleman walked past Petters she looked down. Petters had his back to her.

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.

A Ponzi scheme is a type of investment swindle in which investors are paid off by with money from later investors.

The Associated Press contributed to this article.