Federal prosecutors unveiled new charges against two men accused of aiding convicted Ponzi schemer Thomas Petters raise money from investors. Frank E. Vennes Jr., 53, of Palm Beach, Florida, and James N. Fry, 53, of Orono, Minnesota, each faced charges in indictments filed by the United States Attorneys Office in Minneapolis for their involvement in Petters' $3.6 billion Ponzi scheme. Petters, the mastermind of the scheme, was sentenced to 50 years in April 2010.
Vennes had originally been indicted in April along with two other men whose connections to several Palm Beach hedge funds ultimately resulted in $1 billion in investor funds placed with Petters Co. Inc. While the April indictment charged Vennes with four counts of securities fraud, the superseding indictment filed Tuesday drastically expanded the Government's case, replacing the four charges of securities fraud with twenty-four counts of fraud, money laundering, and making false statements on credit applications. Prosecutors allege that from 1999 to September 2008, Vennes participated through his company, Metro Gem, in over 700 transactions involving hundreds of millions of dollars that netted profits exceeding $140 million. If convicted on all counts, Vennes would face up to 330 years in prison.
Fry was charged with twelve charges of fraud and making false statements. Fry operated Arrowhead Capital Management LLC, which provided consulting services to hedge funds that invested in Petters' scheme. If convicted of all counts, Fry faces up to 60 years in federal prison.
A copy of the Department of Justice news release announcing the indictments is reproduced here.