Petters Fraud Case Stirs New Legal Ripples

ST. PAUL, Minn. (AP) -- Minnesota lawmakers are considering changing the rules on money that may be recovered for victims of businessman Tom Petters' $3.7 billion Ponzi scheme.

Minnesota Public Radio reports the change would limit the recovery of investment income earned by charitable or religious organizations that took gifts from Petters or his associates. The law change would make clear that multiple kinds of donations can be protected after a certain time limit.

Tom Petters (credit: Sherburne County Jail)

Some charitable foundations confronted by claims from a court-appointed receiver support the change. But the receiver, Minneapolis attorney and former white-collar prosecutor Doug Kelley, says it could take $35 million off the table.

Petters is serving a 50-year prison sentence after being convicted in a multi-count fraud in 2009. The scheme involving money laundering and fake invoices related to Petters' electronics retailing spanned 15 years and affected over 250 victims.