Updated: 11/13/2009 8:24 PM KSTP.com | Print |  Email
By: Becky Nahm & Brad Sattin

Businessmen Testify about Petters Deals Gone Wrong

Two long-time Minnesota businessmen told the jury in the Tom Petters fraud trial that Petters borrowed millions of dollars from them and then tried everything to get out of paying them back.

Irwin Jacobs and Ted Deikel were on the stand Friday.

Jacobs, of Wayzata businessman, said in the late 1990s, Petters agreed to pay him $4 million for his retail stores. But, when it was time to pay, Jacobs said the checks were late and bounced.

Jacob said, at one point, Petters told him he could get the money if Jacobs agreed to falsify some documents.

Jacobs said he refused and threatened to start foreclosure proceedings.

Petters did eventually pay Jacobs, but Deikel wasn't so lucky. He lost $7.5 million.

Deikel was a friend of Petters. The men partnered together to run Petters' Fingerhut mail catalogue company.

Deikel said he loaned Petters $10 million to buy and then resell electronics, not knowing the electronics never really existed.

According to Deikel, Petters kept the charade going up until the end. He said just days before the raid on his headquarters, Petters wrote him a letter saying "Never one of these deals again, no matter how good it looks. Our friendship is what matters."

"Somebody very smart said the thing you better understand is the person you thought you knew does not exist. That's where I'm left," said Deikel.

The government's last witness, an IRS agent, took the stand late Friday.

Petters' defense attorneys could start presenting their case on Monday.

Petters faces 20 counts, including wire fraud, mail fraud, money laundering and conspiracy. Petters' attorneys have said he is innocent.