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Jury adjourns till Monday in Ponzi fraud case

By Todd Melby

ST. PAUL, Minnesota (Reuters) - Accused Ponzi schemer Tom Petters will wait at least six more days to learn his fate after a federal jury adjourned deliberations without reaching a verdict over whether he orchestrated a $3.65 billion fraud.

Prosecutors have accused the founder of Petters Group Worldwide Inc of using one of his companies, Petters Co, to bilk investors, who thought he was using their money to buy consumer electronics for resale to retailers such as Costco Wholesale Corp and BJ's Wholesale Club Inc.

The defense argued that the 52-year-old, Minnesota businessman did not know about any fraud until just before his offices were raided. It argued others, including former top executives Deanna Coleman and Bob White, who both pleaded guilty in the case, engineered the scheme.

Petters' operations once included businesses such as Polaroid Corp and Sun Country Airlines Inc, but went bankrupt last year after he was charged with 20 counts of wire fraud, mail fraud, money laundering and other charges.

If convicted on all charges, Petters faces up to life in prison.

The trial has lasted for nearly four weeks in federal court in St. Paul, Minnesota, and jurors have deliberated for more than nine hours over two days.

On Tuesday afternoon, they asked the presiding judge, Richard Kyle, why both Petters Group Worldwide and Petters Co were named in the indictment and whether the former was an umbrella company for Polaroid, Sun Country and other entities.

Kyle referred jurors back to the indictment and his jury instructions, and its own recollection of the evidence.

Petters' case gained greater notoriety after Bernard Madoff was arrested last December for running an estimated $65 billion Ponzi scheme. Madoff is serving a 150-year prison sentence.

Jon Hopeman, a lawyer for Petters, told reporters "I've seen juries go 28 days, I've seen them go two hours."

A Ponzi scheme occurs when money from new investors is used to repay earlier investors.

Jurors accepted the judge's offer not to deliberate on Wednesday, ahead of the Thanksgiving Day holiday on Thursday. There will be no deliberations on Friday as well.

The case is USA v. Petters et al, U.S. District Court, District of Minnesota, No. 08-00364.

(Reporting by Todd Melby; Writing by Jonathan Stempel, Editing by Leslie Gevirtz)

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