Cayman funds sued.
Palm Beach Offshore Ltd and Palm Beach Offshore II Ltd, both based here, and Geoffrey Varga, who reportedly resides here, have had a civil complaint filed against them by Florida-based Palm Beach Finance Partners LP (PBFP) and Palm Beach Finance II LP (PBF II) at the US District Court for the District of Minnesota. The suit claims that Petters Capital, which was created as a "special purpose vehicle" to raise financing for alleged acquisition of merchandise, was running a Ponzi scheme in which "little or none of the merchandise to be bought and sold ever existed";
The Petters Group has also reportedly been embroiled in a criminal indictment brought against it and its former CEO and Chairman, Thomas Joseph Petters, by the US District Attorney for alleged investment fraud believed to total more than US$2 billion. Petters and his companies were indicted on seven counts of mail fraud, three counts of wire fraud, one count of conspiracy to commit fraud, and one count of money laundering conspiracy. It was also reported that Thomas Petters faces a further eight counts of money laundering.