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Owner of Low-Cost Carrier Jailed for Fraud

by Josh Lew on Oct 6th 2008 at 11:30AM

Businessman Tom Petters was arrested in Minnesota on Friday as part of a federal fraud investigation. He is the head of an investment group that owns Sun Country Airlines, along with stakes in several other businesses. He was charged with wire and mail fraud, money laundering and obstruction of justice. Investigators allege that he masterminded a plan to bilk other investors out of at least one billion dollars.

A federal judge in Minneapolis order Petters to be held without bail after a taped phone conversation revealed that the disgraced entrepreneur planned to leave the country. A hearing is scheduled for Tuesday. Petters has stated that he plans to fight to be released from custody and maintains his innocence.

What does this mean for Sun Country? The struggling budget carrier has always operated on a shoestring. Petters has agreed to step down from his decision-making position so that the airline will not be harmed by the scandal. However, the scandal comes on the heels of the announcement that Sun Country is struggling and will be "temporarily" cutting staff's salaries by 50%.

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Reader Comments (Page 1 of 2)

NELLY Oct 7th 2008 8:16AM

HE MUST NOT BE A FRIEND OF BUSH OR CHANEYS HE WOULD HAVE GOTTEN BY WITH IT. NEXT TIME REMEMBER BEFORE YOU STEAL MILLIONS OR BILLIONS OF DOLLARS, YOU HAVE TO GREASE THE PALMS IN WASHINGTON.

Jeff Oct 7th 2008 8:16AM

The real truth is if were the head of Freddie Mac or Fannie Mae he would not only get away with it but also serve on Barrack Hussien Obama's election committee.

mick Oct 7th 2008 9:22AM

go have another six pack, stinky magoo.

prettymom247 Oct 7th 2008 12:46PM

OMG!!! you must be really stupid or ignorant - it was not Obama that bailed out Freddie Mac and Fannie Mae with our money, it was Bush & Chenney -and to follow their foot steps will be old man with a Cain and Winkie-Blinkie & Nod Palin

Dave Oct 7th 2008 1:33PM

Prettymom? Pretty maybe but smart...NOPE. The head of Obamas search for VP and an advisor to Obama was the head of Fannie. Fannie and Freddie were propped up by the Dems. You are just plain dumb. If its a government program...its the DEMS. Fannie and Freddie have long been known to be an old folks home for the DEMS leaving office. Both sides have blame but I have to correct you when you are just plain wrong.

pop gun Oct 7th 2008 8:17AM

save what money you have tom , take the plea , the feds will offer to shoot your wife in the head or shoot you in the foot , which do you want !

Herman Oct 7th 2008 8:17AM

Love to fly, but dont like the long ones, such as LAX to Sydney, or Auckland, NZ to LAX. Somehow, Chicago to Beijing wasnt so bad, and neither was the return from Hong Kong to SFO

Ken Oct 7th 2008 9:08AM

I guess he should have been ole Barney Franks girlfriend for a night anyone still proud to be an american. Lets get more liberal folks. You think this is the end of it ha ha ha you better hope obama doesnt get the job you might think 4 more years but you stupid dems whos in control who just put us up the river for 700 billion Barney Frank hum Dem Polosi hum Dem how many Dems bragging about how good a job they did with giving Wall Street more money to flush lets go dems being a Rep I hope Obama gets the job I want to see all the Dems still playing the blame game whats he going to do NOTHING just like all of them now except be someone else's girlfriend you go Barney Frank

Bill Oct 7th 2008 9:20AM

Obama is from Chicago and its history of corruption. Obama helped Acorn and got a lot of money from Fannie May and Freddie Mac. Obama did not support regulation of Fannie May and Freddie Mac. So who is the crook with bad judgement. Obama and the democrats caused the financial crisis we are in now. Granted the Republicans did not fight hard enough for us an allowed Congress to spend too much. Lowering taxes brought in more income tax revenue during Bush's administration than the Clinton administration. The problem was Congress spent more than it took in. Now you want to blame the Republicans for the ills of the Democrats. Barney Frank who is a Democrat did the oversight of the Financial industry and blocked all efforts to regulate it. He blocked President's Bush effort to regulate Fannie May and Freddy Mac back in 2003. So keep blaming the wrong person and making the same mistake and watch the Democrats take the country into another depression.

Mac Oct 7th 2008 9:20AM

Apparently Nelly hasn't become familiar with Barney Frank and others of his ilk during the last few days....

Greg Oct 7th 2008 10:53AM

The Republicans controlled the House of Reps. AND the Senate AND the Presidency from 2000 to 2006 when most of this was happening. They were The Kings of irresponsible spending and The Kings of deregulation. Mcain said for the last 10yrs he prefers less regulation. Three weeks ago he suddenly changed his mind. And suddenly it is the Democrats fault?

bud Oct 7th 2008 11:11AM

I agree with greg. The REPUGNICANS had the check book for 6 of the last 8 years. Funny how the Mccain people have turned to blatant character assasination now as he sinks farther and farther in the standings. Big mac sold his soul for this run at the big house with deadeye Palin. At least when Billy boy left the big house he left us with a surplus instead of debt up to our eyeballs for 3 generations to come and having to borrow money from the commies for our war in iraq.

Bob Oct 7th 2008 5:07PM

In 2005, all the republicans on the senate finance committee voted to prevent Fannie and Freddie from accepting sub-prime loans. They also voted to appoint a regulator for these entities who would have broad powers to regulate (similar to bank regulators). All of the democrats on the committee voted against this proposal effectively killing the bill in committee. The two largest recipients of Fannie and Freddie money are Sen Dodd (democrat chairman of the senate banking committee) and Obama. We are about to elect the fox to manage the chicken coop.

Ted Langs Sr. Oct 7th 2008 11:14AM

I sure don't appreciate the government from throwing money at wall Street because Bush and Paulson say so.
What is even worst is that Democrats and Republicans both fell for it. Being an independent I still will vote for the man with the Harvard degree and not the one that barely made it through Annapolis at the bottom of his class. Being from AZ I don''t even want him as a Senator. Along with Kyle they have done nothing for our State

johnnybravo300 Oct 7th 2008 1:10PM

the feds get jealous when someone else steals. its job security for them if they are the only criminal organization that gets away with it.

william Oct 7th 2008 1:32PM

Does no one remember senator Mccains remarks about aliens low paying wages? He offered to "pay out of his own pocket, to Americans willing to work for less than $50 an HOUR!
Last time I recieved a paycheck , it was NOT from him. and FAR LESS THAN THAT America.
This man has no grip on life in America, I am not sure where he lives, except lucky you-dream world.
Lets ask Arizonians, ...has he paid you yet?

OLE BOB Oct 7th 2008 1:42PM

The airline just filed Chapter 11 in order to restructure. It does have interest from sources to invest in the airline but until Sun Country sheads itself from under Petters, no one will take a chance.

As far as employees taking a 50% cut in wages, it is true. The airline alleges that the employees will receive full back pay with interest. We shall see.

RDP Oct 7th 2008 1:45PM

This crisis was not caused by Bush or even directly by Wall Street. It was caused by the lending policies of Fannie Mae and Freddie Mac and the Democrats in congress as well as Clinton who pushed them to lower their lending standards so that more lower income people could afford houses. These toxic mortgages were then repackaged and sold as securities to firms on Wall Street who thought that because they were coming from a government backed entity they were legit. When the mortgages behind these securities started to default the investment banks started to fail with them. Bush warned in both 2003 and 2004 that these institutions were too big and needed greater oversight because if they failed they would have too much of an impact on our economy. Democrats in congress including Barney Frank rebuffed Bush and said these institutions were sound and Bush was just using scare tactics. McCain also promoted new regulations in 2005 for these institutions but it was Democrats in the banking committee who unanimously rejected them, because these mortgages were for minorities and they didn't want to appear racist.

I suggest you go read the New York Times article dated September 30, 1999 titled "Fanie Mae Eases Credit to Aid Mortgage Lending".

Of the top twenty recipients of Fannie Mae/Freddie Mac lobbyist funds all are Democrats. Number one is Chris Dodd and number two is Barack Obama.

Obama also has two former executives of Fannie Mae as top advisors, Franklin Raines and James Johnson. Obama sued Citibank in 1994 Under the CRA (Community Reinvestment Act) to force it to make bad loans. So he can blame Bush all he wants, he knows where the real fault lies.

Steve Oct 7th 2008 2:04PM

If, at it seems, that no one is happy with the group of crooks currently running OUR country, then get off your dead butts in November and vote them all out of office. Then, go into the back hill of Kentucky or the state of your choice, find some old guy with a piece of rope holding his pants up and tell him that he is in charge and now running things. At least in that way, we'd get someone with some common sense and someone who didn't have his hand out nor his hand in you back pocket. If you'll all notice, no COMMON person,(Read that as male or female) EVER gets into office in this country without the backing of at least some major business interest and a ton of money. So much for a government,"By,of and for the people".