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Edina man sentenced to prison in Craigslist investment fraud

11/24/2015 12:42:00 PM

MINNEAPOLIS – Minnesota Commerce Commissioner Mike Rothman announced that Jeffery Alan Petersen, 57, of Edina, has been sentenced in Hennepin County District Court to nearly seven years (80 months) in prison for a fraud scheme that used ads on Craigslist to swindle a dozen victims out of $337,000.

Petersen pleaded guilty in September to 22 counts of securities fraud and theft by swindle.&p>

The case was investigated by the Minnesota Commerce Fraud Bureau. The Commerce Department had previously revoked Petersen’s securities and insurance licenses, but recently learned that he was back in business.

The investigation found that Petersen placed ads on Craigslist to attract 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.

All of that was false. Instead, the money clients gave Petersen to invest disappeared through a combination of theft and his own losses in the market.

As part of the investigation, an agent with the Commerce Fraud Bureau answered one of Petersen’s Craigslist ads. The undercover agent went to Petersen’s house, where Petersen made more of his claims and showed a spreadsheet of successful trades. Agents from the Commerce Fraud Bureau subsequently executed a search warrant at Petersen’s home.

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 Petersen accepted a check for $25,000 from the undercover agent. He was arrested.

Commerce is here to help

If you have questions or concerns about a possible scam or fraud, contact the Commerce Department’s Consumer Services Center by email at consumer.protection@state.mn.us or by phone at 651-539-1600 or 800-657-3602 (Greater Minnesota).

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