Since 1990, Peterson has 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.
He's also boosted his cause with manufactured credentials, including an ambassadorship in the fictitious financial "empire" known as the Dominion of Melchizedek.
Armed with impressive-looking paperwork and a huckster's relentless patter, Peterson works variations of the same theme--defrauding people of money and property in exchange for worthless assets and empty promises.
Public records indicate he's been doing this for years, interrupted only during prison stints in Minnesota and Arizona.
Already on parole from Arizona State Prison, Peterson faces new felony-fraud charges in Maricopa County. But he and his wife of 32 years, Mary, keep their roots shallow and their suitcases packed. They fled Arizona in June and authorities haven't seen them since.
The couple split shortly before police raided Peterson's east Phoenix offices, home of Bass 'n Man, Inc., a shell corporation whose subsidiaries included a fishing-lure manufacturer. Mary Peterson isn't charged with any crimes.
Assistant attorney general Sheila Madden, a veteran prosecutor of white-collar crime, calls Stephen Peterson "the trickiest guy to get a read on--to understand exactly what he's up to in this or that scheme."
Peterson is a chilling, colorful example of how career confidence men operate. Though the man remains shrouded in mystery, New Times pieced together much of his story through use of public records in several states and by numerous interviews.
Able to cite Biblical and stock quotations at will, the physically imposing Peterson--six foot seven, 265 pounds--oozes charm and credibility. His promises of easy money are seductive, his invented track record impressive. He has a loyal, Scripture-quoting wife whose mere presence after three decades with him helped to convince potential investors of his stability and trustworthiness.
Peterson's latest-known victims include a northern California man named Terry Graham. Last year, the 47year-old Graham sunk his life savings--about $40,000--into a fraudulent Peterson financial scheme. This time, it was foreign treasury bills that were supposed to yield huge, quick returns.
They didn't. Early last year, Graham parked his motor home at Peterson's Phoenix office, hoping his presence might right things. He says Peterson kept insisting that the promised windfall was just a few glitches away. Then the Petersons skipped town.
Now, Graham says, his ranch is about to be foreclosed. "Iwas the village idiot," he says. "I guess I wanted the whole enchilada, and I wanted it fast. Steve said he could get it for me. He lied."
Peterson's victims cover the spectrum: Many, such as Terry Graham, greedily let themselves be seduced by sweet-sounding promises. Others are fellow crooks--scamsters who've been scammed themselves.
Yet others are the true innocents, people who thought they were dealing with a reputable gentleman. Sun City West residents Geri and Bill Buell fit into that category.
In late 1990, they agreed to sell The Capriccio--their 63-foot luxury yacht--to Peterson for $1.3 million. It took the couple four years and cost them more than $100,000 in legal fees and incalculable heartache before they could undo Peterson's scheme and sell the boat to a legitimate buyer.
There's a final, troubling aspect to the Stephen Peterson story: An uncoordinated, lax effort by Maricopa County probation officers after Peterson's release from prison enabled him to steal great sums of money from a new crop of victims.
Peterson had been placed on probation after his parole in late 1993, supposedly harnessed by a list of tough restrictions. But in February 1994, records show, an investigator with the Arizona Corporation Commission informed his probation officer that Peterson was trying to lease property and to start a new business.
That was forbidden, and should have landed him back behind bars--or at least gotten him a hard slap on the wrist.
The investigator, Billy Oliverio, also noted that Peterson was trying to lure a potential investor with lies about being able to issue letters of credit. This, too, was a probation violation.
Peterson's probation officer told a Maricopa County judge she intended to revoke Peterson's probation. But before that happened, she turned the case over to a new officer, who did nothing until it was too late.
Oliverio kept the new probation officer, Nick Crowder, apprised of Peterson's actions throughout 1994. That fall, he supplied newspaper clippings published in Wapakoneta, Ohio--a town of about 10,000.
Peterson had opened the aptly named Bass 'n Man Lure Company there after the State of Ohio and the Wapakoneta City Council graced him with lucrative tax breaks. But, as a series of articles in the summer of 1994 showed, Bass 'n Man was stiffing numerous local businesses and wasn't producing anything.