Friday, April 29, 2011

Frank Vennes/Tom Petters Interactive Timeline

A while back, I put together a timeline of events in the Petters/Vennes investigation and Bachmann's pardon letter for Vennes - I am in the process of updating it.

Take a look at the timeline at Dipity.


Daily Beast Article on Vennes Ties to Bachmann & Pawlenty

From Michelle Goldberg's Daily Beast article titled " Pawlenty, Bachmann, and the Right's Ponzi Scandal":

Tim Pawlenty and Michele Bachmann sought pardons for a major campaign donor now accused of fleecing faith-based charities in a Ponzi scheme. The 2012 presidential hopefuls should answer for helping make Frank Vennes Jr. respectable, writes Michelle Goldberg.

Last week, Frank Vennes Jr., one of the more bizarre characters in the history of recent financial scandal, was indicted on fraud and money-laundering charges in a U.S. District Court in Minnesota. A former North Dakota pawnshop owner who ostensibly found Jesus while serving a prison sentence in the 1980s, Vennes emerged as a pillar of Minnesota’s conservative Christian community. Then, according to the indictment, he channeled millions into a Ponzi scheme run by the businessman Thomas J. Petters, who is now serving 50 years in federal prison. Much of the money Vennes raised seems to have come from faith-based charities, pastors, and ministers, some of who have lost their life savings.

On its own, Vennes’s story would be a strange tale about audacious cynicism and religious gullibility. But Vennes’s entanglement with two likely presidential candidates, Minnesota Congresswoman Michele Bachmann and former Minnesota Governor Tim Pawlenty, gives it added weight. Vennes was a major donor to both politicians, and both politicians sought pardons for him in order to wipe away the taint of the crimes that first landed him in prison. Vennes’s respectability in conservative Minnesota circles seems to have enabled his crimes. Both Bachmann and Pawlenty should have to answer for bolstering that respectability.

The article mentions the excellent investigative reporting of Karl Bremer. Read Karl's article about the Vennes indictment at Ripple in Stillwater.

Wednesday, April 27, 2011

Karl Bremer: "Was money launderer Frank Vennes Jr. trying to buy a pardon from Bachmann, Pawlenty and Coleman?"

Karl Bremer over at Ripple in Stillwater has a good post on the story of Frank Vennes:

Convicted money launderer and cocaine/gun runner Frank Vennes Jr., a close personal friend and major campaign contributor of Minnesota presidential candidates Michele Bachmann and Tim Pawlenty, has been indicted on federal fraud and money-laundering charges for his alleged role in the $3.5 billion Tom Petters Ponzi scheme.

Vennes became implicated in the Petters Ponzi in 2008. Millions of dollars worth of his assets have been seized and are being liquidated to pay back some of the victims of the multibillion-dollar scam—the largest in Minnesota history. But until now, Vennes had not been charged with a crime for his involvement in the Ponzi scheme, which sent Petters to the U.S. Penitentiary at Leavenworth Federal Prison for 50 years.

If convicted, Vennes could go to federal prison for the second time in his life on such charges—and also be in need of a second presidential pardon.

Besides each taking tens of thousands of dollars in campaign cash from Vennes and his family, Bachmann and Pawlenty—along with former Minnesota Sen. Norm Coleman and former Minnesota GOP Chair Ron Ebensteiner—unsuccessfully sought a presidential pardon from President George W. Bush for Vennes’ federal crimes from the 1980s. Vennes donated heavily to Bachmann’s congressional campaign, Pawlenty’s gubernatorial campaign, Coleman’s senatorial campaign, the state House Republican Campaign Committee, the Minnesota GOP and other GOP candidates, all during the time the four Republicans heartily endorsed his candidacy for a pardon.

The timing of Vennes’ largesse has led many to speculate that it was part of a “pay-for-pardon” plot.

Read the whole thing.

Also read Eric Black's article about Vennes at MinnPost.

Saturday, April 23, 2011

Frank Vennes Talking About God & Money

Frank Vennes Jr. telling how God made him rich (or something like that). The other person introduced is Darrel Amiot who with Vennes spoke at something in February of 2007 called the "God and Money Dinner".

Here's the audio of Frank Vennes Jr. in 4 parts:

Friday, April 22, 2011

Letters From Michele Bachmann and Norm Coleman Requesting a Pardon for Frank Vennes

Eric Black at MinnPost gives a good round-up of the info regarding Frank Vennes and his relationship to Michele Bachmann, Norm Coleman and Tim Pawlenty. Eric Black also mentions the excellent reporting of Karl Bremer (also mentions Dump Bachmann). Read the whole thing.

Here are the two letters requesting a POTUS pardon for Frank Vennes:

Bachjmann Pardon signature

coleman vennes

Thursday, April 21, 2011

Prevost and Harrold Plead Guilty, Will Testify That Vennes Committed Fraud

I attended the hearing today at the Federal Courthouse in St.Paul.

Bruce Prevost and David Harrold agreed to plead guilty to 4 counts of securities fraud each.

The indictment says Vennes recruited Harrold and Prevost in 2002 to raise money for Petters and PCI. PCI was the Ponzi part of the Petters empire. Vennes told Harrold and Prevost that he had negotiated and arranged financing for PCI for 8 years. Vennes described himself as Petters' "financier". Vennes also said Petters requested Vennes act on his behalf in doing the financial wheeling and dealing. Vennes told Harrold and Prevost that he knew Petters' business "intimately" and that Vennes had done due diligence on PCI. Vennes apparently set himself up as the gateway between the Palm Beach hedge fund and PCI.

From 2002 to 2008, in nearly 2,100 transactions the Palm Beach hedge fund invested $8 billion in PCI notes. By September 24, 2008, $1 billion of the hedge fund's investor's money was invested with PCI.

Vennes handled the transactions and made a nifty $60 million in fees.

The indictment says the three con artists conspired to lie to the investors - "swapping" PCI's fraudulent notes to hide the fact that Petters was unable to pay. Vennes did all the documentation on the note swaps. After as they were swapping the notes, they were taking investors' money... $75 million from more than 30 investors.

Vennes is charged with money laundering - a charge having to do with a $98, 814.12 check to the law firm of Howse & Thompson.

Will Frank Vennes also plead guilty?

Stay tuned...

(Click sketches to make them larger)

Cross-posted at Dump Bachmann.

Frank Vennes Hedge Fund Cohort Bruce Prevost to Plead Guilty Today

Yesterday, I posted the news that Frank Vennes and his two hedge fund partners Bruce Prevost, and David Harrold were indicted for fraud (Vennes has an additional charge of money laundering).

The Federal Court in St. Paul has hearings today for Harrold and Prevost - Prevost will apparently be entering a guilty plea. Listen to Bruce Prevost and Frank Vennes talking to Tom Petters in this audio selection from the wire of Deanna Coleman at a meeting 9/9/08:

Petters Cohort Frank Vennes Jr. Indicted for Fraud and Money Laundering

UPDATE: MNDOJ Press release HERE:

Three Florida men indicted for lying to investors about hedge fund’s investment with Petters

MINNEAPOLIS – Three Florida men, a business associate of Thomas J. Petters and two hedge fund managers, were indicted today in federal court in Minneapolis for fraudulently marketing a hedge fund’s investments in Petters Company, Inc. (“PCI”). Frank E. Vennes, age 53, of Stuart, Florida; David W. Harrold, age 51, of Del Ray Beach, Florida; and Bruce F. Prevost, age 51, of Palm Beach Gardens, Florida, were charged with four counts of securities fraud in relation to this alleged crime. In addition, Vennes was charged with one count of money laundering.

PCI was owned and operated by Petters, who represented that funds invested in PCI promissory notes would be used to finance the purchase of electronics and other consumer merchandise. Purportedly, PCI would then resell that merchandise, for a profit, to certain “big box” retailers, including Sam’s Club and Costco. In truth, however, no merchandise was bought or resold. Instead, Petters diverted for his own personal benefit hundreds of millions of dollars. His $3.65 billion Ponzi scheme unraveled in 2008, when federal agents executed search warrants at his business offices and other locations. He was subsequently prosecuted and, in April of 2010, sentenced to 50 years in federal prison. He is currently serving his sentence in the federal
penitentiary in Leavenworth, Kansas. Petters began the PCI Ponzi scheme in or before 1993. Starting in the late 1990s, he raised
most of the proceeds of the fraud by selling PCI notes to large hedge funds, managed and
operated by hedge fund managers. Hedge fund managers had a fiduciary duty to their investors.

They made representations to their investors regarding the investments, the due diligence performed on the investments, and the financial mechanisms put in place to protect the hedge fund’s investments in PCI. In exchange for their efforts, the hedge fund managers obtained management fees from investor funds.

The indictment returned today charges Harrold and Prevost with defrauding hedge fund investors. The men co-founded Palm Beach Capital Management, which served as the investment adviser for the four Palm Beach hedge funds. According to the indictment, Vennes directed Harold and Prevost to communicate with Petters and PCI only through him. In November of 2002, Harrold and Prevost purportedly first invested hedge fund money in PCI, and as of September 24, 2008, the hedge funds reportedly held PCI investments totaling approximately $1 billion. Between 2002 and 2008, Harrold and Prevost’s companies allegedly grossed more than $58 million in management fees. For his part, Vennes received more than $60 million in commissions based on the Palm Beach investments in PCI.

Allegedly, the defendants made material misrepresentations and concealed material information about the PCI investments in order to induce investors to purchase securities. For example, investors were told that when a retailer purchased consumer electronics or other goods from PCI, those products were paid for by the retailer with funds directly deposited into a bank account under the control of Harrold and Prevost’s management companies. As a result, investors were falsely assured that all PCI transactions were, in fact, occurring. However, the defendants knew the hedge funds received payments from PCI alone and never from retailers. Moreover, by February of 2008, millions of dollars of PCI notes were on the verge of default. Between February and September of 2008, the defendants engaged in a scheme to swap more than $1 billion worth of PCI promissory notes to create the appearance that PCI could repay the notes held by the Palm Beach funds. All note swaps allegedly went through Vennes. During that same time period, Harrold and Prevost allegedly continued to report to investors that the hedge funds were generating steady profits and, encouraged and assisted by Vennes, solicited new investors and additional money from existing investors, raising more than $75 million in new money from more than 30 investors.

If convicted, the defendants face a potential maximum penalty of five years on each securities fraud count, while Vennes is subject to as much as ten additional years in federal prison for money laundering. All sentences will be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service–Criminal Investigation Division, and the U.S. Postal Inspection Service, with the assistance and support of the Securities and Exchange Commission. It is being prosecuted by Assistant U.S. Attorneys Timothy C. Rank and John Docherty.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes,

ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.


Here's a good summary of Bachmann's connection to convicted felon Frank Vennes Jr. by Karl Bremer:

In 2008, it was revealed that Bachmann had received tens of thousands of dollars in campaign contributions from Frank Vennes Jr. and his family. Vennes is a convicted money-launderer/cocaine runner/gun runner for whom Bachmann had requested a presidential pardon in 2007.

When Vennes became implicated—but never charged—in the Tom Petters multibillion-dollar Ponzi scheme in 2008, it didn’t take long for Bachmann to abandon her principled “innocent until proven guilty” stance. She quickly rescinded her pardon request for her close personal friend, and then tried to further save face by giving away a portion of the money she had taken from Vennes and family—although it was only $9,200 of the $27,400 she had hauled in from the Vennes family from 2005-2008.

Bachmann first tried to give the money to Minnesota Teen Challenge, a favorite evangelical charity of Bachmann’s that once had very close ties to Vennes. He is a former board member of the organization. However, Minnesota Teen Challenge allegedly lost $5.7 million in investments in Petters companies that were made through one of Vennes’ companies.

Rich Scherber, executive director of Minnesota Teen Challenge, said his organization sent Bachmann’s $9,200 check back without even cashing it.

“We didn’t want to be involved if it was dirty money,” Scherber said at the time.

Bachmann eventually found a willing taker for her tainted Vennes money when she donated it to R3, a collaborative of Christian recovery groups that happens to include Minnesota Teen Challenge.

More about Frank Vennes...

Listen to Frank Vennes talk at God & Money Dinner.

Bizarre Audio of Tom Petters, Bruce Prevost and Frank Vennes Jr. Talking Religion (and Money)

Posts about Vennes at Karl Bremer's Ripple in Stillwater blog.

Bachjmann Pardon signature