How prosecutors say Petters' alleged scheme worked

Prosecutors say Petters Co. Inc. was just a common Ponzi scheme at its core.

Tom Petters and his co-conspirators allegedly fabricated business documents such as bank records and purchase orders from purported vendors. They allegedly used these documents to fool investors _ typically hedge funds and other private investment groups but also individuals and charities _ into thinking he was using their money to buy electronics that he would resell at a profit to big-box retailers such as Costco and Sam's Club.

But the merchandise and the sales never existed, prosecutors allege. Instead, they say, investors would be paid with money Petters and his accomplices …