Former Whitefish Bank Swindler Back Behind Bars

By Beacon Staff

SPOKANE, Wash. – A Spokane, Wash., man who was a key figure in the collapse of a Montana bank has been ordered back to federal prison for another three years.

A federal judge revoked John Earl Petersen’s supervised release Wednesday for failing to disclose personal financial transactions after his release from federal prison.

Assistant U.S. Attorney Tom Rice told the court that Petersen had gained power-of-attorney over his 95-year-old aunt, placed her in a nursing home and moved into her Spokane house. Rice says Petersen then diverted at least $627,000 from his aunt’s stock and bank accounts, with $400,000 of it going for his personal use.

Petersen was arrested in February 1998 and accused of being behind the $10.5 million collapse of a Whitefish, Mont., bank. He pleaded guilty to conspiracy, money laundering and bank fraud in that case.