A Madison-area businessman was convicted Thursday of a financial fraud scheme including bank fraud, making false statements and money laundering, according to a state Department of Justice release.
Christian Peterson, 44, of Fitchburg, was convicted after an eight-day jury trial in federal court, according to a release. The jury deliberated for approximately 15 hours over a three-day period before finding Peterson guilty of eight of the 13 counts in the indictment.
“It's about choices and lies,” U.S. Attorney John Vaudreuil said. “And Christian Peterson, every time he had a chance, a decision to make, the evidence shows that he lied. And he lied to banks over and over and over again, and this is the result.”
Peterson is the former owner of the Pancake Café, Fitchburg’s Country Inn & Suites and the now-closed Good Times Restaurant.
He was convicted of three counts of bank fraud, two counts of making false statements, two counts of money laundering, and one count of theft from an employee benefit plan, officials said. He was acquitted on five other counts.
During the time period related to the charges in the indictment, Peterson operated businesses in Wisconsin and Nevada related to scrap foam and the manufacture of carpet cushion, built and operated a hotel in Wisconsin, and was involved in real estate development in Dane County.
The indictment said that Peterson misrepresented to banks that loans and a business line of credit were intended for a legitimate business purpose when, in fact, he used all or a portion of each loan and line of credit to gamble at casinos or for personal expenses.
The indictment said that Peterson claimed that certain accounts receivable were loans when, in fact, they were the result of gambling debts.
“Once we started we knew we had somebody who we knew was, quite frankly, willing to lie to take money to fund large-scale gambling,” Vandreuil said.
The indictment also said that he took nearly $30,000 from an employee pension benefit plan and then used the money to, among other things, make a $10,000 loan payment for another business venture and to pay his former wife $7,500 in court-ordered alimony.
“That is the hallmark of fraud. People don't think they've been lied to, and we're able to stand back and say, wait a minute. We see this bank and this bank, we see the casino, and what was a small picture to this bank, and they may not have seen it, when you're able to see the whole picture, and that takes time to really get the full scope of the conduct,” Vaudreuil said.
Jim Spahr, a former business partner of Peterson, said he lost his house over Peterson’s spending. Spahr said he was often impatient with the trial process, but now he can move on.
“I know for us, it's like a new chapter in our life can get started again,” Spahr said.
Peterson faces a maximum penalty of 30 years in federal prison on each of the bank fraud counts, 30 years on each of the false statement counts, 20 years on each money laundering count and five years for the theft from an employee benefit plan.