Charges Filed for Theft of Real Estate Development Project Funds

Allison Tussey —  November 17, 2011 — 1 Comment

Virginia Marie Carlson, 60, and her husband, Philip Lee Carlson, 55,  Wayzata, Minnesota, will make their first court appearance Nov. 22, 2011, on major theft by swindle charges in connection with the defunct Amber Woods commercial real estate project in Orono, Minnesota.

The couple are each with four counts of theft by swindle over $35,000 and one count of attempted theft by swindle over $35,000.

The office building development, with room for about 10 businesses, began construction in 2007 but came to a halt in mid-2008.

The Carlsons needed help to secure financing for the project, so in 2006 they entered into a partnership with a company called Hilloway East. That company would own 51 percent of the project and together the partnership was able to arrange financing of more than $6 million from Commercial Bank of Bloomington.

The Carlsons, through their company, Interspace, acted as the general contractor on the project. They were to submit draw requests on the loan to the bank and its agent and use that money to pay the subcontractors. In return, Interspace was required to provide the subcontractors invoices and lien waivers to the bank.

According to the criminal complaint, beginning in October 2007, the Carlsons began submitting fraudulent invoices for payment. In one case, Virginia Carlson submitted an invoice for $31,985 to pay Logan Ryan Corp. A forged signature of Rory Synstelien is part of the invoice. Synstelien is Virginia Carlson’s son and he denied that he did any work on Amber Woods through a company called Logan Ryan and never sent an invoice or signed his name.

Two employees of the Carlsons told investigators that the couple told subcontractors to inflate their invoices so Interspace could take some of that money and they also had false invoices from subcontractors created.

The scheme began to unravel when officials of Hilloway East began hearing complaints from subcontractors that they had not been paid, even though the money had been given by the bank to Interspace.

The Hennepin County Attorney’s Office filed the charges against the couple. 

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One response to Charges Filed for Theft of Real Estate Development Project Funds

  1. Carlsons have been ‘set-up’ by their business partners; Michael Leuer, Robert Roos, and James Fenning with the invented crime of ‘theft by Swindle’ that does not exist. Carlsons’ partners schemed to make ‘false statements’ to police in their effort to get Carlsons convicted; to deter authorities from the real crimes that Carlsons were not privy to until most recently. Michael Leuer, James Fenning, and Robert Roos colluded with First Commercial Bank, and its agent Land Title to commit mortgage fraud, wire fraud, bank fraud, real estate fraud, and more. The bank has since been shut down by the FDIC when the Feds seized the bank records on September 7, 2012 after a 3-year Ceases and Desist Order. The FDIC special task force will be investigating the mortgage fraud committed by Michael Leuer, Robert Roos, James Fenning, together with First Commercial Bank. Michael Leuer, James Fenning, and Robert Roos are now under investigation by the IRS for tax evasion.

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