Tom Petters' former best friend,
restaurateur Dean Vlahos, choked up as he testified about how Petters had
betrayed his trust. Vlahos testified he originally invested $16 million with
Petters, and that at a 36 percent interest rate return he made $42 million over
eight years on that investment.
But in the end Vlahos said he lost the $16 million
principal investment plus another $10 million he borrowed to enter into a deal
to purchase Circuit
City merchandise.
Bob White who has pleaded guilty on the stand says he became part of the fraud
in 1999. He said he got a phone call from Petters who said, "I'm in big
trouble."
When he arrived at Petters' office he found
Petters crying. Petters told him, "I'm ruined if you can't help me."
White said together, he and Petters came up with phony bank statements
to make it look like Petters had "spent the money the way he said it
had been spent." White said Petters told him the problem would be
corrected in two months.
But White said Petters kept coming to him for more
phony documents. In nine years, White said he created more than 10,000 bogus
documents designed to keep the fraud afloat and con investors into investing
with Petters.
White said he, Petters and Coleman were terrified
when the accounting firm Arthur Anderson audited the company in 2003. White said
he fabricated more documents for the audit. The audit found nothing wrong and
White testified he remembered thinking, "Halleluiah!"
