Updated: 11/05/2009 10:28 PM KSTP.com | Print |  Email
By: Becky Nahm

Former Friends of Petters Testify Against Him

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One man who invested in Petters Co. and another who worked for the company took the stand in the fraud trial of their former friend, Wayzata businessman Tom Petters.

Petters is accused of running a $3.65 billion Ponzi scheme involving the phony sale and purchase of electronics.

Dean Vlahos, the founder of Champps and Redstone restaurants, told jurors Petters was his best friend. They spoke daily and exchanged expensive gifts. He also said he trusted him.

Vlahos trusted Petters enough to invest $26 million in various deals. They were deals that went south when the government raided Petters Co. headquarters on Sept. 24, 2008.

Vlahos said, "that was a bad day."

Vlahos said Petters insinuated it was a big mistake, and may have pointed the finger at Deanna Coleman, the former Petters Co. executive who alerted the FBI to the alleged scheme.

Vlahos broke down on the stand over one Petter's email shown in court that said, "I love you and miss you."

In another email to Vlahos, Petters wrote, "I am truly sorry for the trouble it has caused you, wanted to do better for both of us."

Robert White, a former Petters Co. executive who pleaded guilty to fraud-related charges, told the court Petters was in charge and that he micromanaged everything.

White also testified that he created thousands fake checks and purchase orders back in 1999 to support the alleged fraud.

He said that is when Petters called him and begged him "to save his neck."

White said the two knew each other from doing smaller business deals in the early nineties.

When asked by prosecutors why he made the bogus checks and financial statements, White said he wanted to help out a friend.

White told jurors he was always nervous and Petters played off that. White said Petters often banged on his door and yelled "FBI" as a practical joke.

Petters did not have a visible reaction to the testimony.