Kingpin in Whitefish Fraud Scheme Walks Out of Court

By Beacon Staff

SPOKANE, Wash. (AP) – A confessed Whitefish bank swindler who answered a summons for parole violation walked out of the courtroom and drove away, apparently after spotting legal documents showing he was about to be arrested.

John Earl Petersen, 54, jaywalked across the street from the U.S Courthouse here to his black 2007 Cadillac and drove to an unknown destination Tuesday afternoon, stranding his lawyer, Bevan J. Maxey, who had ridden with Petersen to court from his north side law office.

Petersen reported to a courtroom filled with FBI agents, deputy U.S. marshals and federal probation officers for a 2 p.m. hearing, but was gone by the time his case was called U.S. Magistrate Cynthia Imbrogno.

“He showed up, read some papers and then fled the courtroom,” Assistant U.S. Attorney Thomas O. Rice told Imbrogno. “He’s no longer here.”

Rice would not comment on the new accusations against Peterson until he is arrested.

According to earlier court filings, Petersen failed to make $2,000-a-month restitution payments for nearly $2 million he owes for his role as kingpin in a fraud scheme from 1990 to 1996 that led to the collapse of Mountain Bank of Whitefish, Mont.

After being arrested, Peterson agreed to testify against half a dozen bank officials who accepted bribes from him and all were sentenced to lengthy prison terms.

Peterson was sentenced in 1998 to nine years after pleading guilty to conspiracy, bank fraud and money laundering, but because of his testimony Judge Fred Van Sickle went along with a recommendation from government lawyers and cut his term to five years.

Petersen pocketed $6.5 million in the scheme, according to records in the case. Several of his assets were seized, but much of his ill-gotten gains were never recovered or accounted for.

Petersen was ordered into court in March 2006 for violating conditions of his supervised release, which put him under court supervision through next May, but was allowed to remain at large by promising to provide financial information, avoid liquor and other drugs and meet other conditions.

He was cited again on Nov. 28 for violating supervised release.

Petersen has been living in Spokane at the home of his 95-year-old aunt, apparently using her bank account to lavishly remodel the residence after moving her into a nursing home, according to an affidavit from a federal probation officer.

The work included installation of large television monitors in nearly every room of the house, “including a refrigerator equipped with a flat-screen television monitor in the door,” the probation officer wrote.