According to an article that appeared on the Miami Daily Business Review website, a lawsuit filed by Palm Beach Finance Partners against GE Capital alleges the finance firm learned about the Ponzi scheme perpetrated by Thomas Petters long before it was exposed but kept silent to get back more than $48 million in outstanding debt.
Palm Beach Finance Partners filed for bankruptcy protection in December 2009 saying it lost more than $1 billion in a fraud led by Thomas Petters, the founder of Petters Group Worldwide, who was accused of running a $3.5 billion fraud for more than a decade. Petters, who was found guilty and is serving a 50-year prison sentence, duped hedge funds into investing in phantom bulk orders of electronics for retailers, including WalMart, Sam’s Club and Costco.
The Business Review said, according to attorneys for Palm Beach Finance, GE Capital was paid $48 million by Petters to end their relationship once the finance firm started to question a series of fake invoices and checks supposedly sold to Costco. The law suit alleges that GE Capital learned in 2000 that Petters was producing false invoices for these deliveries but did nothing and “kept silent rather than report it.”
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