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Feds raid Petters Group headquarters in Minnetonka

Associated Press

MINNEAPOLIS — Federal agents on Wednesday searched the suburban headquarters of Petters Group Worldwide, which has Sun Country Airlines and Polaroid among its holdings.

FBI spokesman Paul McCabe confirmed that the FBI, the U.S. Attorney’s Office, the IRS criminal investigative division and the U.S. Postal Inspection Service were all part of an ongoing investigation.

Employees were sent home from the company’s Minnetonka office for the day.

There had been no arrests, McCabe said.

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Company spokeswoman Andrea Miller said the investigation relates to one financial entity with which Petters is involved. "Petters has investments in a number of companies," Miller said. "We are not sure of the company exactly."

The company did say in a statement, however, that the investigation does not involve Sun Country Airlines, Polaroid, uBid (part of Enable Holdings, Inc.), catalog and online retailer Fingerhut or magazine group Great Waters Media — all Petters companies.

"Petters Group Worldwide is cooperating fully with the investigation. The company will make additional information available as it is known," the statement read.

Miller wasn’t certain when employees would be able to return to the company’s offices. She confirmed that company attorneys were at the headquarters with law enforcement officers but said she hadn’t heard additional information beyond what the company had already released.

Wendy Blackshaw, a spokeswoman for Sun Country Airlines, said the airline has been told that its day-to-day operations aren’t affected by the investigation. Blackshaw said she knew no further details.

The company is named for founder and chairman Tom Petters, a well-known businessman in the Twin Cities and the company’s chief executive.

Petters has made a career of buying businesses, some of them well-known companies that have fallen on hard times, and seeking to turn them around.

Petters Group, which had $2.3 billion in revenue in 2007, has investments in dozens of companies and wholly owns several, including Polaroid, which Petters Group purchased in 2005 for $426 million. Petters Group also owns Great Waters Media, which previously was called Metropolitan Media Group.

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Petters Aviation, a subsidiary of Petters Group, in 2006 acquired Sun Country Airlines, which has fallen on hard times along with other airlines due to high fuel prices. The company’s chief executive this year took a pay cut and dozens of employees were let go.

In June, Sun Country executives went before Minnesota lawmakers seeking more than $50 million in aid over two years to maintain regular service in the Twin Cities.

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