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Tuesday, January 04, 2011

J.P. Morgan Sued For Role In Hedge Fund Ponzi

A court-appointed receiver trying to recover funds for victims of Tom Petters' Ponzi scheme has sued JPMorgan Chase & Co. for more than $300 million, alleging the bank should have known that money it seized from Petters was the result of fraud.

The Minnesota businessman was convicted last year of perpetrating a $3.7 billion Ponzi scheme that counted hedge funds, pastors, missionaries and retirees among its victims. Prosecutors said the one-time owner of Polaroid Holding Co. and Sun Country Airlines orchestrated the plot, but Petters has blamed his associates and is appealing his 50-year prison sentence. JPMorgan, its affiliates and some individuals seized more than $300 million in assets from Petters in the wake of his arrest.



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