Scammer in Slammer

Career con man Stephen Charles Peterson sat in a Maricopa County courtroom last Friday afternoon shackled to several other jail inmates.

If he weren't wearing a black-and-white striped jail suit, the physically imposing, bespectacled 57-year-old would have fit right in among the attorneys waiting to process their clients' criminal cases.

On Commissioner Edward Bassett's docket was a hearing to determine if Peterson should be returned to prison for violating the terms of his 1993 release from the Arizona Department of Corrections. Peterson fled Arizona in June 1996, while on probation after serving about two years of a five-year prison sentence on fraud and theft charges. (He also served a previous prison term in Minnesota on similar, white-collar fraud charges.)

Peterson remained among the missing until last September, when investigators from the Arizona Attorney General's Office got wind that he was working under an assumed name in San Antonio, Texas. Prosecutors would say only that a business associate of Peterson's in San Antonio turned him in after learning of his shady past.

A New Times story ("King of Scamalot," March 21, 1996) described how Peterson had used legitimate institutions--city councils, a governor's office, a large corporation, a secretary of state, even the United States Coast Guard--to his own illegitimate advantage. His phony credentials included an ambassadorship in the fictitious financial "empire" dubbed the Dominion of Melchizedek. Using those credentials and a glib line of patter, Peterson defrauded people of money and property in exchange for worthless assets.

The story described how, in September 1989, Peterson had incorporated the American Security Corporation in Nevada. He also formed the Keebee Corporation, a Delaware firm whose stock was worth pennies. Finally, he started the Preservation Corporation, incorporated on May 30, 1990, under the laws of the so-called Dominion of Melchizedek. (The dominion, which existed only on paper, was "founded" by a career thief who called himself Branch Vinedresser--real name: Mark Logan Pedley.)

Peterson moved to Phoenix in 1990, at which time he listed his net worth with the Arizona Corporation Commission at $18 million. That year, he moved into the top three floors of the Pinnacle West building on Phoenix's north Central Avenue. He was evicted nine months later after never paying any rent.

The story told how a Sun City West couple in late 1990 had agreed to sell their 63-foot luxury yacht--The Capriccio--to Peterson for $1.3 million in cash from the expected "proceeds" in Keebee stock.

It took the couple four years, the anguish of a convoluted bureaucratic snafu, $100,000 in legal expenses and some good luck to undo Peterson's nearly successful scam, and allow them to sell the boat to a legitimate buyer.

In May 1991, a grand jury indicted Peterson on nine felonies stemming from The Capriccio caper and a related $110,000 loan from a New Mexico doctor.

Peterson was supposed to pay the Sun City couple $90,000 over several years after he was paroled in early 1992. But he never paid them a cent. That, in part, likely would have led to probation revocation and incarceration in 1996 had he not split town with his wife, Mary.

During Peterson's Arizona prison stint, a psychologist wrote of him, "[He is] irresponsible, resistive, criminally oriented, manipulative, ego-centered . . ."--a classic confidence man.

Peterson's attorney, David Derickson, asked Commissioner Bassett to postpone last Friday's violation hearing to give him more time to prepare. The hearing was rescheduled for mid-April.

Peterson is facing the possibility of spending the rest of his life behind bars if prosecutors win the day in court.

--Paul Rubin

Read our original story online at'S DOOM STATE MISSPENT $

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Paul Rubin
Contact: Paul Rubin