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Sirens & Gavels

Repeat con artist headed back to prison

Convicted bank swindler John Earl Petersen is pictured in 1997. (S-R archives)

A convicted bank swindler who boldly walked out of a Spokane courtroom three years ago to avoid arrest is headed to federal prison.

John Earl Petersen, the key figure in the collapse of a Montana bank more than a decade ago, was sentenced this morning to 27 months for stealing nearly $170,000 from a brother and sister in 2006 after telling them they would receive $100 million in return.

Petersen was convicted of wire fraud and tax evasion, the latest for an admitted con man and frequent Las Vegas gambler who had a business office in Spokane when he was arrested in 1998, accused of masterminding the $10.5 million collapse of Montana Bank of Whitefish, Mont.

Petersen, 61, admitted to bribing bank officials to allow him to cash phony checks. He served five years in prison after turning in co-conspiring bank officials. He was sent back in 2008 after investigators alleged he was misusing his 95-year-old aunt’s money.

At his parole revocation hearing in 2008, federal prosecutors said Petersen used more than $400,000 of her money for personal use, including a lavish home remodel.

Petersen was arrested on the new federal indictment just as he was to be released from SeaTac federal prison on Dec. 8, 2010.

He also is charged in Spokane County Superior Court with nine counts of felony theft for the alleged scheme against his aunt. Spokane County prosecutors were waiting for Petersen to resolve his federal case, which he did today after pleading guilty last May.

In addition to 27 months in prison, Petersen is to be on probation for three years and pay $167,794.94 restitution.

Petersen shocked federal authorities in December 2007 when he walked out of U.S. District Court in Spokane after reviewing paperwork indicating he would be taken into custody at the hearing.

He sped away in his Cadillac and was arrested five months later in Boulder, Colo., with a blond wig and books about changing identity.

Past coverage:

Feb. 1, 1998: Agent paints Petersen as loan-sharking mobster


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