Governor, Commerce Silent on Ponzi-Scheme Lawsuits

In April 2010, Thomas Petters of Minnesota was sentenced to 50 years in federal prison for masterminding a $3.7 billion, 14-year Ponzi scheme – one of the largest scams in U.S. history.

Michael O’Shaughnessy, also from Minnesota, led several companies owned by Petters, including the Polaroid Corp., during the time federal authorities said Petters was operating the Ponzi scheme, records show. Although O’Shaughnessy faced no criminal charges, ongoing federal lawsuits against O’Shaughnessy allege that he improperly received nearly $9.4 million in bonuses and fees that were funded by defrauded investors. The suits seek reimbursement of the money to investors and creditors.

O’Shaughnessy’s legal problems weren’t mentioned during Thursday’s announcement by Gov. Nikki Haley and others that a Minnesota-based company led by O’Shaughnessy, known as Element Electronics, will open a plant in December in Fairfield County to manufacture flat-screen televisions.

The Nerve learned of the federal lawsuits and obtained copies of the documents after the announcement.

“Today’s announcement represents a big step for our company, and we are excited to locate our new operations in Fairfield County,” O’Shaughnessy said in a press release prepared by the S.C. Department of Commerce. “South Carolina provides an excellent business environment for our television manufacturing operations, and we look forward to doing great things here. We appreciate all the support we’ve received from state and local officials.”

Officials said the $7.5 million investment is expected to generate 500 jobs, about 250 of which would be created within the first year.

Neither O’Shaughnessy, who is listed in the Commerce press release as president of Element Electronics, nor his attorneys in the federal lawsuits responded to phone messages Tuesday from The Nerve seeking comment on the suits.

Fairfield County officials contacted Tuesday by The Nerve said they were unaware of O’Shaughnessy’s legal problems.

“Fairfield County has no knowledge of these things you mentioned,” said Milton Pope, the county’s interim administrator, though he added, “I will try to do some due diligence to communicate with the Department of Commerce about that.”

Asked whether the proposed television manufacturing plant would be affected – and whether taxpayers would be asked to contribute more toward the project – if O’Shaughnessy has to repay millions in the federal suits, Pope replied, “I would be totally presumptuous commenting on that at all.”

“The research on those types of things is not done by the county,” said Fairfield County Council Chairman David Ferguson. “They are done by the Department of Commerce and the Governor’s Office.”

“There are a lot of people who look at these projects before they get all the way down to the county level,” he added.

Read the full story at TheNerve.org.