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Well-known Fargo builder, Pelican Rapid resident and wife face felony charges

FARGO - Fargo homebuilder Larry Villella, known for his "Hey, how you doin'?" advertisements, and his wife face felony charges for allegedly exploiting her 75-year-old father out of more than $100,000 and forging his signature on a loan guaranty to benefit their business.

Documents obtained by The Forum show the guaranty was used to back more than $1 million in loans that Villella and his wife, Catherine Ann Sadler-Villella, took out to finance homes being built by their construction business, Larry Villella Inc.

"What they have done is just unbelievable," said Marty Isom, whose father, retired Fargo psychiatrist Lawrence Isom, is the alleged victim in the case.

Villella's attorney, Mark Beauchene, said Sadler-Villella had power of attorney to act on behalf of her father, who "always supported their construction business."

Beauchene said the couple cared for Lawrence Isom, who has Alzheimer's disease, for 2½ years, going so far as to remodel their Fargo home to accommodate him.

"Their feelings were that they were putting his best interests paramount to any of their concerns," he said.

Villella and Sadler-Villella were arraigned Friday in Cass County District Court on charges of Class A felony exploitation of a vulnerable adult and Class B felonies of forgery and misapplication of entrusted property. Villella is charged as a conspirator for the forgery and misapplication charges.

If convicted of the charges, the Pelican Rapids, Minn., couple each face up to 40 years in prison.

At the request of defense attorneys, the judge has sealed an affidavit of probable cause detailing the investigation leading to the charges.

The charges accuse Sadler-Villella of forging her father's name to an unlimited commercial loan guaranty in Fargo for the benefit of Larry Villella Inc. Villella is accused of

conspiring with her to forge the man's name, court documents state.

Villella and Sadler-Villella appeared in court with their attorneys Friday on the three felony charges.

Bail was set at $10,000 bond or $1,000 cash bail. Neither defendant has any prior convictions, Assistant Cass County Attorney Tristan Van de Streek said.

Bail was posted for both defendants immediately following the appearance.

"Both of our attorneys have advised us to say no comment," Sadler-Villella told a reporter Friday.

Van de Streek wouldn't discuss details of the case because of the sealed affidavit.

Some of the circumstances leading up to the criminal charges are laid out in a civil lawsuit filed in January by Bremer Bank against the couple and Lawrence Isom, a retired Army psychiatrist who worked at Dakota Clinic in Fargo for about 15 years.

The bank claimed that Isom missed interest payments on a $200,075 loan he took out in January 2007 and that the Villellas missed interest payments on a $200,000 loan obtained in May 2006 and secured by Isom's guaranty.

Isom's attorney filed a cross-claim, arguing that the retired doctor suffered from dementia and the effects of Alzheimer's disease at the time of the alleged transactions.

Villella and Sadler-Villella "were well aware" of her father's lack of mental capacity, but they "nonetheless exerted undue influence over Lawrence C. Isom in presenting him with promissory notes from Bremer Bank, for which their business interests would derive the sole benefit therefrom," wrote Isom's attorney, Robert Manly.

Isom told a court-appointed guardian ad litem in December that he wanted to sue the couple "and make sure that all the money is returned.

"He stated that he did not care if they had to go to jail because he feels that he was taken advantage of," guardian ad litem DeAnn Pladson of Fargo wrote in her report.

The cross-claim seeks more than $50,000 in damages from the Villellas.

In a motion filed earlier this month, Bremer Bank said that after serving its original complaint, it learned the guaranty wasn't signed by Isom "but was in fact signed by Cathy Sadler-Villella."

The bank has since reached a settlement agreement with Villella and Sadler-Villella, but is still seeking a judgment of more than $190,000 from Isom, according to court documents.

Marty Isom, the oldest of Lawrence Isom's five children, said his father was diagnosed with Alzheimer's in 2004. He said he and Sadler-Villella moved their father from Santa Fe, N.M., to Fargo in February 2005 because he could no longer safely care for himself.

Marty Isom said he was given power of attorney over his father in 2004, but Sadler-Villella had it switched over to her in March 2005 without his knowledge.

The guaranty, dated Feb. 26, 2008, came to light after another sister moved in with the Villellas to help care for their father, said Marty Isom, who lives in Santa Rosa, Calif.

"The entire family is in a state of disbelief," he said. "Neither one of them has admitted they've done anything wrong or shown any remorse."

Beauchene said the couple haven't done anything wrong. He noted that the section of North Dakota law that lays out penalties for exploitation of a vulnerable adult says there is no criminal liability on a person who has managed the adult's funds, assets or property "in a manner that clearly gives primacy to the needs and welfare of that person or is consistent with any explicit authorization."

"So, they feel that they've done everything that they could in their power to look after his best interests, to enhance the quality of his life, and they certainly don't feel like they've committed any criminal act as it relates to Cathy's father," he said.

Marty Isom said after he found out about the personal guaranty, he asked Bremer Bank how much debt was against it. He provided The Forum with a copy of an Oct. 24 letter from Bremer Bank Assistant Vice President Ray Grefsheim stating that the total outstanding dollar amount of the notes to Larry Villella Inc. was $1,038,544.

"My father was such a tightwad with his money," Marty Isom said. "He would never do this."

Villella has built a number of homes in south Fargo, as well as Fargo's Johnny Carino's restaurant and the new Mexican Village in south Fargo, according to

The business also received the Horizon Award in 2006 and 2007 in the $190,000 to $210,000 category from Parade of Homes. The award is for the best of show winner.

The couple are scheduled to appear in court Sept. 18.