Economy-Finance

Accused US Ponzi schemer: I learned of fraud late

 * Petters defense rests case

 * Petters said realized fraud only after-the-fact

 * Petters accused of $3.65 billion Ponzi scheme

 * Jury may get case on Monday

 By Art Hughes

 ST. PAUL, Minn., Nov 20 (Reuters) - Minnesota businessmanTom Petters made a final push on Friday to convince a federaljury he was not responsible for a $3.65 billion Ponzi schemethat bankrupted his company.

 Petters testified for a little over half an hour on Friday,after previously testifying for two full days and part of athird, before his lawyers rested their case.

 Questioned by prosecutor Joe Dixon in St. Paul federalcourt, Petters maintained that he was not responsible for afraud at his company Petters Group Worldwide LLC, which defenselawyers have tried to pin on subordinates.

 "You were living in a false world," Dixon said, alluding tothe defense that Petters lacked intimate involvement in dailyoperations that might have uncovered the fraud sooner.

 "Apparently I was," Petters responded.

 "Sir, you were raising money fraudulently."

 "That is a fact I realized after it happened."

 Petters' now-bankrupt empire once included companies suchas Polaroid Corp and Sun Country Airlines Inc.

 It crashed last year when he was accused in a 20-countindictment of fraud, money laundering and other charges.

 A Ponzi scheme occurs when money from new investors is usedto repay earlier investors. Petters has tried to convincejurors that a former subordinate, Deanna Coleman, and othersconducted the fraud for which he is being tried.

 Coleman has pleaded guilty in the case, and testifiedearlier this month against Petters as a prosecution witness.The two had a brief sexual relationship, Petters testified.

 Prosecutors have accused Petters of promising investors bigreturns through financing his company's purchase and sale ofelectronics goods to retailers such as Costco Wholesale Corp(COST.O ) and BJ's Wholesale Club Inc (BJ.N ).

 They have also said Petters concocted fake checks andpurchase orders to deceive retailers into believing that he wastransacting more business with them than he actually was.

 U.S. District Judge Richard Kyle scheduled closingarguments and jury instructions for Monday, and the case may goto the jury that day.

 The judge said jurors will decide whether to deliberate onWednesday if they have by then yet to reach a verdict, or elseresume deliberations the following Monday. The trial began morethan three weeks ago.

 The case is USA v. Petters et al, U.S. District Court,District of Minnesota, No. 08-00364. (Reporting by Art Hughes; Writing by Jonathan Stempel, editingby Matthew Lewis)