The Tom Petters Ponzi Scheme

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and the investors received a small return. This was a profitable for all parties involved as everyone was making money and the stores did not have to have their money tied up in inventory (SecondFraudFilm). It was a legitimate and respectable business until Petters made one change; he started inflating prices and falsifying purchase orders in order to obtain funds for personal uses. This turned it into the standard ponzi scheme, when he took investors money and paid them a "return" from the money he received from other investors and sometimes their own money (Hayes). While investors believed they were investing into a legitimate business, they were actually being scammed by a salesman who, unknowingly to them, had a history of mischievous behavior. The fraud lasted from 1995 to 2008, when his secretary, Deanna Coleman informed on him to the government because a hedge fund investor started asking too many questions and her conscious finally got the best of her. She was ...

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