9/14/2015 10:14:43 AM
For Immediate Release:
MINNEAPOLIS – Minnesota Commerce Commissioner Mike Rothman announced that Jeffery Alan Petersen, 57, of Edina, pleaded guilty today to 22 counts of securities fraud and theft by swindle in Hennepin County District Court.
In addition, Petersen admitted facts allowing the judge to consider his actions to be major economic crimes. In particular, he admitted that his crime went on for a long time, that it involved more than $330,000, that he used a position of trust to facilitate his crimes, and that he had administrative agency findings against him. Those admissions will allow the Hennepin County Attorney’s Office to seek a longer prison term than what the Minnesota Sentencing Guidelines recommend.
Petersen’s sentencing is set for November 23.
"We stopped Petersen from doing his appalling scams claiming to be a successful and experienced options trader when he was neither,” said Rothman, whose agency conducted the criminal investigation. “In fact, even after we revoked his securities license for multiple violations, he had no business presenting himself as someone who could invest other people’s money. He took the victims’ money and either spent it on himself or lost it through his own high-risk stock trading.”
"People often focus on armed robberies, but there are all sorts of ways to steal money and Mr. Petersen was quite prolific in his swindles,” said County Attorney Mike Freeman. “He made a practice of misrepresenting what he had done and what he could do, and people trusted him based on those representations. We intend to seek a substantial amount of time in prison when he comes up for sentencing.”
Petersen was set to go on trial Monday. Instead, he entered a straight plea, meaning it will be up Hennepin County District Court Judge Tanya Bransford to determine his sentence. Petersen’s attorney is expected to ask for probation, while Assistant Hennepin County Attorney Ben Schweigert told the judge that he will be asking for more than 71 months in prison.
Petersen was charged in November following an investigation by the Minnesota Department of Commerce’s Fraud Bureau.
According to the criminal complaints and his admissions in court, Petersen used advertisements he placed on Craigslist to obtain investors, promising them that he would trade their money in stock options and make them profits. Petersen said he had developed a strategy where he only did low-risk trades and that he had a long history of successful options trading, according to the criminal complaint. In fact, the records showed Petersen had no history of trading success and investigators were unable to identify any client for whom Defendant made money.
He also failed to tell his investors that his securities and insurance licenses had been revoked and that he was subject to two Commerce Department cease and desist orders prohibiting him from engaging in unlicensed investment activity, the complaint states.
In September 2013, an agent for the Commerce Department’s Fraud Bureau answered one of Petersen’s Craigslist ads. On October 2, 2013 the undercover agent went to Petersen’s house, where Petersen made more of his claims and showed him a spreadsheet of successful trades. Agents from the Commerce Fraud Bureau subsequently executed a search warrant at Petersen’s home and he was ultimately arrested and booked in the Hennepin County Jail. Several weeks later, not knowing his potential victim was an undercover agent, Petersen contacted him again to see if he still wanted to invest. Peterson and the agent communicated over the next few weeks and on November 14, 2013, Petersen accepted a check for $25,000 from the undercover agent. Peterson was arrested again, according to the criminal complaint.
Petersen used the money he obtained from his victims to make payments on his mortgage and pay his credit card bills, the complaint states.
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Minnesota Department of Commerce
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