Tuesday, November 30, 2010

Pawlenty's pardon problems piling up

"Pardon me" may be two words the presidential wannabe wishes he never heard.

By Karl Bremer

A criminal sex offender recommended for a “pardon extraordinary” by Gov. Tim Pawlenty in 2008 was arrested again in November on multiple criminal sexual conduct and incest charges. But this isn’t the first time Pawlenty’s pardon subjects have run afoul of the law after getting his blessing.

In 2002, Pawlenty sought a presidential pardon for convicted money-launderer/cocaine-and-gun runner Frank Vennes, Jr. That same year, Vennes and his family donated a total of $10,000 to his gubernatorial campaign, and thousands more in 2004 and 2006.

But then on Sept. 24, 2008, federal agents raided Vennes’ $5 million Shorewood home on Lake Minnetonka and his $6 million oceanfront home in Jupiter, Fla., in connection with the Tom Petters Ponzi scheme investigation. According to the federal search warrant, Vennes was alleged to have hauled in more than $28 million in commissions for his role in luring five investors to pony up $1.2 billion in Petters’ giant Ponzi scheme.

On Oct. 6, 2008, the assets and records of Vennes, Petters, Petters’ companies and other Petters associates were frozen by a federal judge, and many seized assets of Vennes’ already have been sold off to compensate victims of the fraud, even though Vennes has never been charged with a crime in the case. Vennes recently proposed a plan to liquidate most of the rest of his assets in exchange for immunity from further lawsuits in the Petters case.

Pawlenty has never responded to requests for an explanation of his apparently close relationship with Vennes. But when the national media begins to scrutinize the struggling presidential candidate’s past a little closer, the subject of Pawlenty's pardon for Vennes is sure to come up.

The Pawlenty-Vennes web

Pawlenty's connections to convicted felon Frank Vennes, Jr. are intertwined in several ways.

Last year, Pawlenty donated nearly $86,000 from his defunct gubernatorial campaign fund to Minnesota Teen Challenge (MnTC), a controversial Christian chemical dependency program that was once closely affiliated with Vennes and allegedly lost millions on account of that affiliation in the Petters Ponzi. Additionally, Pawlenty’s wife, Mary, served on Minnesota Teen Challenge’s Board of Directors with Vennes.

Vennes and his family have contributed thousands of dollars to Pawlenty's gubernatorial campaigns. Kimberly Vennes (Frank's wife), Gregory Vennes, Stephanie Vennes (Gregory's wife), and Colby and Denley Vennes, who have shared an address with Frank and Kimberly, each donated $2,000 to the Pawlenty for Governor Committee in 2002. Frank, Kimberly, Gregory, Stephanie, Colby and Denley Vennes each contributed $250 to Pawlenty in 2004 and $2,000 apiece in 2006.

Was it a coincidence that the same year the Vennes money started to flow into Pawlenty's campaign coffers, Pawlenty's name appeared in a request for a presidential pardon for Vennes sent by Senator-elect Norm Coleman?

In a letter dated Dec. 20, 2002, and sent to President George W. Bush c/o Karl Rove, then-Senator-Elect Coleman said he was “well acquainted with Frank (redacted portion) and that I want to join “my friend, (former Minnesota GOP chairman) Ron Eibensteiner and Governor-elect Tim Pawlenty in urging President Bush to grant Frank Vennes a presidential pardon.”

The roles of Pawlenty and Eibensteiner in seeking a pardon for Vennes are unclear. A Freedom of Information Act request with the Office of Presidential Pardons did not turn up pardon letters from either one, and Pawlenty's office has refused to respond to requests for an explanation as to why he added his name to Coleman’s list of pardon supporters.

The pardon Coleman, Pawlenty and Eibensteiner sought was for Vennes' conviction in 1987 on federal charges of money laundering, cocaine distribution and illegal firearms sale, to which he pleaded guilty and no contest.

Vennes was sentenced to five years in the Sandstone Federal Correctional Facility, where he reportedly “found God” and was released in 1990. Following his release from prison, Vennes filed a petition for a pardon, which has never been granted.

Meanwhile, Vennes was a board member of MnTC as recently as 2008. Pawlenty's wife, Mary, also sat on MnTC's board of directors during at least a portion of the time that Vennes served on the board.

But that organization may have lost millions of dollars as a result of MnTC's investments that Vennes allegedly steered to his associate, Tom Petters, in Petters’ multibillion-dollar Ponzi scheme.

Vennes is alleged to have been a facilitator, or conduit, used by Petters to lure primarily Christian organizations into investing in Petters' companies through Metro Gem - one of Vennes' companies - or through the Fidelis Foundation, which served as a fiscal agent for Minnesota Teen Challenge. Among those investors was Minnesota Teen Challenge, which allegedly lost $5.7 million in investments in Petters companies.

Still, Vennes has not yet been charged with any crimes in connection with the Petters case. Nor has he been named as a defendant in any of the lawsuits filed against Petters and his associates by alleged victims of the fraud.

However, one final question remains: Would a President Tim Pawlenty grant convicted money launderer and alleged Petters Ponzi man Frank Vennes Jr. the pardon he believes he deserves?

Tuesday, November 23, 2010

Remembering Dave Ray at Thanksgiving

By Karl Bremer

It’s after midnight, and as I peer over at the stack of recently played CDs below the stereo, I notice a preponderance of Koerner, Ray & Glover and Dave Ray discs strewn about. Oh, that’s right. Thanksgiving’s coming up.

Dave “Snaker” Ray left us on Thanksgiving Day 2002 after a ferocious battle with cancer (is there any other kind really?). So just as new constellations come into the rotation of the night skies with each passing month, Dave Ray goes into heavy rotation in the CD player every November.

I got to know Dave through decades of seeing him play in West Bank Minneapolis haunts—the Triangle Bar, the Viking, the 400, Coffeehouse Extempore—and those intimate Ray & Glover Thursday night sessions at the Times downtown. We’d get treated to an annual reunion of the legendary folk-blues trio Koerner Ray & Glover with Dave’s erstwhile bandmates “Spider” John Koerner and Tony “Little Sun” Glover. But throughout the rest of the year, you could almost always count on finding Dave playing somewhere at least once a week. Solo, duo, trio, full band, it didn’t matter, Dave would be out there mining obscure blues and other rare gems from his big black songbook, keeping that West Bank flame kindled.

Dave had an extraordinary baritone voice that was as big and black as that songbook of his; it could fill a room without a mic. And he could rip off some of the most dazzling fretwork you ever laid ears on. In 1999, I wrote in the liner notes to “By the Water,” a CD recorded in our living room that featured Dave, Tony and Radiators Camile Baudoin and Reggie Scanlan:

“Dave’s raw, honey-dipped voice shifts effortlessly from gut-bucket blues shouter to crooning balladeer, while he picks notes off a 6- or 12-string like sweet cherries from a tree.”

Always ready with a twisted joke, Dave had a deep belly laugh that shook his whole body, and a sardonic, stiletto wit that he exhibited in full glory in his online rants. Dave Ray was a blogger before there were blogs, and fortunately, his ruminations are archived here.

In one online entry, after offering some driving “tips” to an unidentified driver with whom he had had a recent road encounter, Dave concluded with some friendly counsel:

“If you choose to ignore this advice (and the sundry other suggestions hailing down on you in numbing quantity from everyone unfortunate enough to share your vehicle while you’re driving) then at least accept this final suggestion: put a bag over your license plate before you leave your driveway in case the next guy you infuriate decides to plunk down his five bucks at the DMV, get your home address and blow both your godammed cheeks off so you’ll never sit behind the wheel again.”

We had the good fortune to have had Dave play for many of our house parties. He and Tony performed for at least a half-dozen of our fundraisers for political candidates. And although every one of them lost, we still had candidates begging us to throw parties for them every election year.

I was thrilled when Dave got the trio—Koerner, Ray & Glover—to play for our 20th anniversary in 1998. But when it came time to pay Dave for the gig, he inexplicably refused to take any more than 1/10th of the price we had agreed on. He muttered something about “Well, you know, Happy Anniversary” and that was that.

Dave kept performing right up until the end. Koerner, Ray & Glover played a gig on the East Coast six days before he died. A planned KR&G show at First Avenue the following month turned into a massive memorial for Dave, with an empty chair and Dave’s hat sitting on stage with Koerner and Glover. There wasn’t a dry eye in the joint that night.

There’s some good news for Dave Ray fans in all of this. Koerner, Ray & Glover’s last filmed performance from First Avenue in January 2002 is going to be released on DVD December 15 at First Avenue’s 40th anniversary party (available also at the Electric Fetus and Cheapo Records). Dave’s first two solo records, “Snaker’s Here” (1965) and “Fine Soft Land,” (1967) have been re-released on CD on Wounded Bird Records. And another 2002 recording session featuring two songs Dave laid down with Eddie Kirkland is being readied for release in 2011.

So this Thanksgiving, I’ll give thanks for Dave Ray and all the other fine musicians that make us smile and dance and laugh and cry. The best ones do it for the music and not for the money. Concludes Tony Glover in the terrific documentary “Blues, Rags & Hollers: The Koerner, Ray & Glover Story”:

“Music’s one of my oldest friends. We don’t expect to get rich off old friends. You just figure they’ll be there when you need them. Music usually is.”

Top photo of Dave Ray by Missy Bowen.
Middle photo of Dave Ray with the Radiators by Glenn Kincaid.
Bottom photo of Dave Ray by Chris Bremer.

Sunday, November 21, 2010

Suspected con man "Bobby Thompson" is now on 'America's Most Wanted'

Fugitive from justice gave tens of thousands of dollars to Minnesota Republicans, including Michele Bachmann and Norm Coleman, which likely came from charitable donations to "Thompson's" sham veterans organization.

By Karl Bremer

The man known as "Bobby Thompson" for years was the poster boy for Republican donors, spreading tens of thousands of dollars around to Michele Bachmann, Norm Coleman and Minnesota House Republicans, among others. Now, he's a poster boy of a different type - "Bobby" is featured on "America's Most Wanted."

The AMW site describes how St. Petersburg Times reporter Jeff Testerman happened on the trail of "Bobby Thompson" two years ago:

In 2008, a St. Petersburg Times reporter, Jeff Testerman, was looking into a local political story when he noticed the U.S. Navy Veterans Association was a contributor to a local county commissioner's campaign.

Seeking a quote from the group, Jeff made multiple calls, leaving multiple messages. But in six months of searching, despite 85 USNVA board members, they could only find one of them: Bobby Thompson.

A Happenstance Confrontation

Jeff made the quick trip over to Thompson's modest Ybor City home and saw Thompson pacing out in front of his home, talking on his cell phone. Jeff asked him a few questions for the story he was investigating, which had little to do with Thompson himself. But Thompson immediately got defensive, going off on a 30-minute diatribe accusing Jeff of using yellow journalism tactics.

A veteran investigative reporter for the Times, Jeff knew something was not right about Thompson, and he intended to find out what it was.

Jeff and his investigative team looked into the organization for six months, and he found a number of very odd things:

-The Association wouldn't disclose where the tens of millions of dollars went.

-The Times couldn't find any of the 83 people listed as board members and executives on the tax forms filed with the IRS to claim tax-exempt status.

-The Association's purported headquarters, at 1718 M St., Washington D.C, was little more than a rented mailbox at a UPS Store.

-Why did the director of a multi-million dollar charity organization live in a dilapidated duplex across from a cigar factory?

Jeff had many questions for the U.S. Navy Vets Association, and there were even more questions about Bobby Thompson himself. But he would learn that the more answers he got, the more questions it would raise.

AMW describes "Bobby Thompson" as 5'10", 200 lbs., brown hair and eyes, and says he often sports a beard and mustache, wears glasses and likes to drink tequila. "Bobby Thompson" is a stolen identity. The man known as "Bobby Thompson" also has used the alias "Ronnie Brittain."

No one knows who "Bobby Thompson" really is. He's been on the lam ever since the St. Petersburg Times investigation began and was last seen in a New York City hotel last June.

The Minnesota Connection

I came across "Bobby's" name while researching campaign contributions to Michele Bachmann's fat-cat fundraiser with former half-term Alaska governor Sarah Palin last April. Thompson donated $10,000 to Bachmann's campaign at that event. Further research on Thompson led to Testerman's investigative series and ultimately, an extensive series of articles published here and on DumpBachmann.com on "Bobby's" and the U.S. Navy Veterans Association's questionable operations in Minnesota. That series has led to investigations by the Minnesota Attorney General and Minnesota Campaign Finance and Disclosure Board.

"Bobby's" last political contribution before he disappeared altogether appears to be $5,000 to Minnesota-based Patriot PAC, first reported on Ripple in Stillwater.

The story recently appeared on ABC's Nightly News.

Sunday, November 14, 2010

Apparent loser Tom Emmer trying to get former client's legal malpractice lawsuit against him tossed out

Emmer is a no-show at hearing on lawsuit, meets with Gov. Tim Pawlenty instead to discuss job he'll never have.

By Karl Bremer

Tom Emmer is trying to get a legal malpractice lawsuit filed against him by a former client thrown out because he says he didn’t represent the client on the case the malpractice allegedly took place. According to the Associated Press, Emmer’s attorney, Michael Schwartz, asked Wright County District Judge Stephen Halsey to dismiss the case at a hearing November 8. Halsey took the motion under advisement.

The client, Steven R. Hackbarth, and his roofing contracting company, Hackbarth Enterprises Corporation, both of Silver Lake, a McLeod County town southwest of Emmer's hometown of Delano, filed the lawsuit in September. The lawsuit was first reported on Ripple in Stillwater.

According to Hackbarth’s lawsuit, Emmer represented Hackbarth in a legal proceeding that resulted in a judgment against Hackbarth and cost him his state contractor’s license. Hackbarth says one of his roofing materials suppliers sued him in 2009 over money the supplier claimed Hackbarth owed him.

“People charged my account with the supplier and they weren’t supposed to,” says Hackbarth. “I was disputing that with my supplier, so I asked Emmer to represent me. But he didn’t file the documents he was supposed to file with the court. He showed up the day of the hearing,” but beyond that, Hackbarth told Ripple in Stillwater, “he didn’t do nothing.”

The timing of Hackbarth’s filing led Emmer spokesman Carl Kuhl to charge that Hackbarth was engaging in political “extortion” by trying to get a $200,000 settlement out of the failed GOP candidate for governor so close to the election.

“While Mr. Hackbarth denies political motivation, he made outrageous financial demands prior to filing his suit in the hope of leveraging Tom Emmer's candidacy to advantage himself,” Kuhl told the AP. “Tom Emmer does not negotiate with extortionists.”

Emmer may have been looking for a way to avoid the hearing so soon after his apparent loss to Mark Dayton. Schwartz claimed Emmer could not attend the hearing because he had a meeting with Governor Pawlenty. However, according to the Star-Tribune, that meeting was only planned the weekend before the hearing:

Pawlenty offered to meet with both Democrat Mark Dayton and Emmer to help
them prepare in case they become governor. Late last week, Dayton set up a
meeting for Tuesday at 4 p.m. and Emmer hadn't yet scheduled a meeting.

But over the weekend, Emmer and Pawlenty found a time to meet.
Hackbarth says Emmer has represented him in previous legal matters, and that he’s been a longtime supporter of Emmer’s past political campaigns.

“If he would have just apologized, it probably never would have come to this,” he told Ripple in Stillwater. “I pulled floats for him in parades for years. I have a John Deere tractor. My daughter has a goat, and we’d put a sandwich board on the goat with Emmer signs. And now all I got was kicked in the head. I thought he was my friend.”

Above: Apparent failed GOP gubernatorial candidate Tom Emmer, accused of malpractice.
Photo: rumproast.com.

Thursday, November 11, 2010

Another Minnesota political contribution from alleged fugitive fraudster 'Bobby Thompson' discovered

A Ripple in Stillwater Exclusive

By Karl Bremer

As the nationwide manhunt for the fugitive commander of the U.S. Navy Veterans Association (USNVA) known as “Bobby Thompson” widens, the alleged fraudster’s connection to Minnesota Republicans deepens.

The USNVA was allegedly an elaborate nationwide scam operating as a veterans charity and led by a Florida con artist who stole the identity of another man named “Bobby Thompson.” The organization may have collected as much as $100 million from 2002-2009, most of it unaccounted for. Some of it is suspected to have been funnelled into Republican political campaigns. More than $1.56 million was collected by the USNVA Minnesota Chapter from 2004-2009, and Republican candidates and causes in Minnesota received tens of thousands of dollars in campaign contributions from "Thompson" during that time.

The story received national attention when it appeared on ABC Nightly News November 10.

Ripple in Stillwater has learned that following “Thompson’s” controversial $10,000 donation to a Michele Bachmann fundraiser in Minneapolis April 7 featuring former Alaska half-term governor Sarah Palin--the last known contribution the donor-on-the-lam made--he gave $5,000 to a Republican-leaning Minnesota-based political action committee called Patriot PAC on April 26.

Patriot PAC was formed in 2009 by Joey Gerdin, a Republican political operative who serves as its chair. Gerdin was Finance Director of the Minnesota House Republican Campaign Committee (HRCC) from 2007-2008, during which time the man known as “Bobby Thompson” gave $5,000 to the HRCC and attended a Republican National Convention HRCC event in St. Paul. Next to Gerdin, who donated $11,100 to her own PAC, “Thompson” is Patriot PAC’s second largest contributor.

Gerdin says she doesn’t remember how she became connected with “Thompson.” Because of his donation to her PAC, she’s been contacted by the Ohio Attorney General’s Office, which has a nationwide arrest warrant out on “Thompson” for identity fraud.

The Ohio Attorney General's Office has aggressively pursued the case and claims donations to the USNVA weren't used to aid veterans but instead, diverted to political causes by "Thompson." It earlier had a nationwide arrest warrant out on "Thompson" for identity fraud, and more recently indicted "Thompson" and an alleged accomplice on corruption, money laundering and theft charges.

The Ohio AG's Office also has released a number of photos of the man known as "Bobby Thompson" posing with prominent Republican politicians such as George W. Bush, John McCain and John Boehner, as well as Republican operative Karl Rove.

To Gerdin, Thompson was just another political donor prospect. When raising money for the HRCC, says Gerdin, “I would just call anyone and everyone. I honestly don’t even remember if I cold-called him or he cold-called me. He was coming in for the RNC (Republican National Convention), and I was having a fundraiser downtown with the House caucus.”

Gerdin says she met the alleged con man in St. Paul at the fundraiser she hosted.

“He seemed like a nice guy, completely congenial, supportive of veterans. Seemed like your typical patriot to me.”

The Ohio Attorney General investigator asked her about bank records for the donation to her PAC, she says.

“The check that I got came from him personally, that I know,” she says.

While some politicians—including Bachmann and reportedly the Republican Party of Minnesota—have donated money they received from “Thompson” to other veterans groups following the glare of bad publicity, Gerdin says she has no intention of doing so at this time.

“The money was given to me from an individual who wanted to elect veterans to office … that’s what I basically used it for,” she says. She says she will eventually look further into the matter once things settle down with her current duties as finance director for 8th District Congressman-elect Chip Cravaack.

For reasons yet unknown, “Bobby Thompson,” a Florida resident with no apparent Minnesota connections, showered tens of thousands of dollars on Minnesota Republican politicians and the Republican Party of Minnesota. Besides the $10,000 he gave to Bachmann and the $5,000 he gave to Patriot PAC, he made the following donations to other Minnesota Republicans and GOP entities:

• $21,500 to Republican Norm Coleman’s Senate re-election campaign from 2006-2008
• $7,000 to the Minnesota House Republican Campaign Committee in 2008-2009
• $10,400 to the Republican Party of Minnesota from 2008-2010
• $500 to former Rep. Marty Seifert’s Seifert for Governor Campaign in 2009
• $500 to Republican David J. Carlson’s Citizens for David Carlson committee in House District 67B in 2008.

In addition, the Minnesota Campaign Finance and Public Disclosure Board is investigating a different—and potentially fraudulent—$500 campaign contribution to former House Minority Leader Marty Seifert in 2009 that’s linked to the USNVA.

Norm Coleman and the Republican Party of Minnesota have not responded to repeated inquiries about their relationship with “Bobby Thompson.”

I wrote an exclusive series of reports on the DumpBachmann blog earlier this year examining the political connections between Minnesota Republican Congresswoman Michele Bachmann and the man known as “Bobby Thompson,” as well as "Thompson’s" other connections to Minnesota Republicans and the state GOP. (See the links at the end of this article.)

In my series of articles, I also detailed the USNVA’s shady operations in Minnesota from 2004-2010. My reports were based initially on a year-long investigation of the USNVA by the St. Petersburg Times newspaper, which sparked legal inquiries into the group in at least eight states and by the IRS and Veterans Administration.

The group’s Minnesota operations closely paralleled the allegedly fraudulent operations uncovered in other states. Once the investigations into the USNVA began to gather steam nationwide, the Minnesota Chapter was mysteriously dissolved last May.

After my reports about “Thompson” and the USNVA appeared online, the Minnesota Attorney General’s Office began looking into the group’s Minnesota operations.

Minnesota media, with the notable exception of the St. Paul Pioneer Press's Jason Hoppin, have largely ignored the story.

Meanwhile, Blanca Contreras, an alleged co-conspirator of “Thompson’s,” has been arrested and arraigned by Ohio authorities on charges of racketeering, money laundering and theft of more than $1 million. According to court documents, Contreras “personally withdrew $416,000 in cash from a single USNVA account” between October 2007 and June 2010.

Contreras is being held on $2 million bail.

While Ohio Attorney General Richard Cordray has been the most aggressive in pursuing the man known as “Bobby Thompson,” that could change. Cordray lost in the Nov, 2 election to Mike DeWine, who once received a $500 political contribution in a U.S. Senate campaign from “Bobby Thompson.”

















Sunday, November 7, 2010

Michele Bachmann's pardon pal Frank Vennes Jr. wants out of Petters Ponzi mess

Was post-election filing of plan to settle with investors politically motivated?

By Karl Bremer

The day after Election Day, politically connected convicted money-launderer and Tom Petters associate Frank Vennes Jr. filed a motion in U.S. District Court to approve a “work-out plan” to repay victims of the Petters Ponzi scheme through the liquidation of most of his assets. In return, Vennes and his investment business, Metro Gem, would receive a release from all liability related to financial losses from the Petters scam—a scam that Vennes claims he knew nothing about.

Vennes invested heavily in Petters’ Company notes on behalf of his Metro Gem investors from 1995 to 2008. When federal agents swooped down on Petters in September 2008, Metro Gem had more than $130 million in unpaid investments in Petters notes.

Vennes’ court filings list his total debts at $55.4 million.

Vennes, a heavy-hitting political contributor to Republicans Congresswoman Michele Bachmann, Governor Tim Pawlenty and former Senator Norm Coleman, as well as Democratic Senator Amy Klobuchar, was implicated but never charged in the multibillion-dollar Petters Ponzi scheme. His millions of dollars in assets, which included gold and silver coins and figurines, artwork, Harley Davidsons, and properties in Minnesota, North Dakota, Ohio and Florida, have been frozen and in receivership since the Petters scheme came crashing down over two years ago. Some properties already have been liquidated.

The Nov. 3 timing of Vennes’ first motion seeking relief in over two years is curious—especially given his close political and personal ties to Bachmann, who was engaged in an expensive re-election battle with Tarryl Clark until Nov. 2. Revisiting the story of Bachmann’s relationship with a convicted money launderer during the election would not have helped Vennes’ former beneficiary.

Pawlenty, who has been grooming himself for national political greatness after he leaves his part-time job as governor of Minnesota in January, also isn’t likely to be thrilled to see Vennes’ name back in the headlines.

Besides taking tens of thousands of dollars in campaign contributions from Vennes and his family, Bachmann, Pawlenty, Coleman, and former state GOP Chair Ron Ebensteiner all solicited a presidential pardon during the Bush administration for Vennes’ past federal crimes of money laundering, cocaine- and gun-running. That was after Vennes was released from Sandstone Federal Prison but before he became implicated in the Petters Ponzi. The issue raised questions about whether Vennes was engaged in a “pay-for-pardon” scheme.

Due to the negative publicity over her close relationship with Vennes after the Petters scandal broke, Bachmann first rescinded her pardon request and then gave to charity a portion of the campaign contributions she had received from Vennes that election year—despite the fact that Vennes is still presumed to be innocent. But even that proved to be problematic for the congresswoman. She first tried to donate the money to Minnesota Teen Challenge, where Vennes once sat on the board of directors with Mary Pawlenty, Tim Pawlenty's wife. But being a victim of Vennes’ involvement in the Petters Ponzi themselves, Minnesota Teen Challenge returned the money to Bachmann.

Coleman, Pawlenty and the state GOP did not return any of Vennes’ allegedly “dirty money.” None of the recipients of Vennes’ tens of thousands of dollars in political contributions have ever responded to inquiries about their relationships with the convicted money launderer.

Listed among Vennes’ secured creditors in his proposed work-out plan is Richard Scherber, executive director of Minnesota Teen Challenge. Documents filed with Vennes’ proposal show Scherber was owed $910,000 when the Petters scheme ended. Minus the returns he had received on his investments with Vennes, Scherber had an out-of-pocket loss of $423,759, according to court documents. Under Vennes’ proposed work-out plan, Scherber would receive only $173,741.

Also listed among Vennes’ secured creditors is locally owned First State Bank of Bayport, shown as a co-creditor on four individuals’ IRAs. Total out-of-pocket losses shown for those IRAs is $1.4 million. Under Vennes’ proposal, those IRAs would recover only $574,067 of their combined out-of-pocket losses.

“The work-out plan represents the best opportunity for Mr. Vennes’ creditors to receive meaningful financial recovery for their losses sustained as a result of the Petters fraud,” Vennes’ motion states.

Vennes notes that he is under “no compulsion” to enter into any agreements with creditors. Since he has not been charged with any crime, he is not facing a forfeiture or restitution order and says he could just as easily have filed for bankruptcy, leaving his creditors with little or nothing.

Vennes is the subject of a $2.7 billion “clawback” lawsuit in the bankruptcy proceedings of Petters’ estate. However, Vennes proclaims his innocence in the Petters Ponzi and has filed claims against Petters.

“Metro Gem, Inc., and I were victims of the Petters fraud,” Vennes states in court documents filed with his work-out proposal motion. “I was not a co-conspirator of Thomas J. Petters or anyone else in that fraud.”