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Trustee is targeting money in Australia, Malta and the Cayman Islands

Petters claw back case could go worldwide

The trustee in the Tom Petters bankruptcy case has asked the judge for permission to extend his claw back efforts outside the borders of the United States.

Doug Kelley said Petters’ $3.65 billion Ponzi scheme extends to a total of 26 jurisdictions. A hearing on his request in scheduled in U.S. Bankruptcy Court later this month. Kelley said that residents of Australia, Ireland, Switzerland, the Netherlands and Malta will be targeted and there are hundreds of millions of dollars at play. The list of countries could expand, he said.

The money ended up outside the U.S. because foreign investors invested in feeder funds that in turn invested in larger hedge funds that invested with Petters, Kelley said in an interview with the Star Tribune.

“We’ll get records of the master fund and then records of the feeder funds and then we’ll know where to go,” Kelley said. “We basically reverse the process.”

The bankruptcy team has hired lawyers outside the U.S. to identify potential targets.

The bankruptcy has been underway for five years. Kelley has retrieved more than $400 million to be returned to creditors and investors who lost money. Petters is serving a 50-year prison sentence.

 

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