FBI busts General Counsel for drug possession

Two years ago, David Baer was flying high.

The 35-year-old was general counsel of Petters Group Worldwide, had a wife and two dogs, and he'd recently been named one of Minnesota's attorneys of the year by Minnesota Lawyer.

How did he do it all? With stimulants, according to the FBI.

Baer's dream life apparently came crashing down quickly on Sept. 24, 2008, when federal agents allegedly found a safe full of illegal drugs under his desk at work. The FBI and other federal agents raided the Petters offices and the homes of some of its executives in search of evidence of the businesses' fraud and money laundering. TwinCities.com reported that in the process of those raids, agents found hidden in Baer's safe 7.4 grams of cocaine, 10 ecstasy pills, and 30 pills that tested positive for a mix of methamphetamine and caffeine known as yaba.

Early last week, the Hennepin County attorney's office filed a criminal complaint against Baer. He was charged with fourth-degree felony possession of ecstasy, fifth-degree felony possession for the meth, and second-degree cocaine possession, according to TwinCities.com. Why authorities waited so long to file the charges is unclear. A call to a spokesman for the district attorney's office was not returned.

Baer's next court appearance is scheduled for mid-January. His attorney, Doug Peterson of Leonard, Street and Deinard in Minneapolis, e-mailed the following statement to CorpCounsel.com:

"Mr. Baer takes these allegations seriously and will work with the authorities to respond to the allegations in an expeditious and appropriate manner. As we are still in the early phases of this case, it's not appropriate for us to offer any further comment."

In early September 2008, federal prosecutors were tipped off by a co-conspirator that Petters Group Worldwide CEO Tom Petters was executing a multibillion-dollar Ponzi scheme that dated back a decade. Prosecutors said Petters and his associates lured investors to lend money to buy and sell electronics that never existed — and the money invested was used to pay off old lenders.

Petters was found guilty of 20 counts of fraud last December and sentenced to 50 years in prison. Seven other defendants pleaded guilty to lesser crimes. Baer was not implicated in the federal claims. He is, however, named in a bankruptcy suit asking that he give back more than $3.2 million in bonuses. After the Petters fraud, Baer left to start his own business — Ethos Business Law.

If the charges are proven, what could could have driven Baer to drugs? Possibly the stress of dealing with the fallout from a multibillion-dollar Ponzi scheme.

According to Eileen Travis, director of the New York City Bar's lawyer assistance program, studies show that lawyers are at a heightened risk for developing stress-related substance abuse problems and mental health issues. Lawyers are almost twice as likely (15 to 20 percent) as members of the general public (10 percent) to have the risk factor, Travis said.

"If you have that risk factor, then you've really got a problem on your hands," she said. "These are good people who happen to have a problem that changes their judgment, and they find themselves in big trouble," Travis said.

Baer joined Petters in 2003 after spending four years at Leonard, Street and Deinard. He quickly moved up to the top lawyer job. In a March 2007 interview with Minnesota Lawyer celebrating his being named one of its top lawyers of 2006, Baer said he was happy to have moved from the firm to Petters.

"I was very happy there, but I always knew in the back of my head that the law firm environment wasn't where I wanted to be for my entire life," he told the magazine. "I always knew I wanted to go in-house, where I'd have likely more autonomy and flexibility," he added.

Well, it was fun while it lasted.

(Published by Law.com - November 19, 2010)