Edina Woman Pleads Guilty in Ponzi Scheme
A 43-year-old woman has been linked to a Ponzi scheme involving approximately $3.65 billion. Michelle Webster Palm, 43, of Edina, pled guilty in federal court on Friday, April 8, 2011, to aiding and abetting criminal activity between September 2007 and September 2008.
According to reports, Ms. Palm pled guilty to one count of securities fraud and one count of providing false statements to a government agent. Her guilty plea was made before U.S. District Court Judge Richard Kyle.
Ms. Palm was the vice president of special operations and later became the managing director of finance at Arrowhead Management. Arrowhead Management, which is the operator of three hedge funds, primarily invested in Petters Company, Inc, the owner of which, Tom Petters, was sentenced last year to 50 years in prison for orchestrating the $3.65 billion Ponzi scheme.
According to Ms. Palm's admission in court, she hid pertinent information from investors that millions of dollars of Petters' notes being held by Arrowhead Management were almost in default. Reports indicate that Arrowhead Management received approximately $35 million in fees during the life of the fund.
Ms. Palm's sentence hearing has yet to be scheduled. She faces up to five years in prison for each charge.