Former Minnesota attorney gets 18 months for bankruptcy fraud for hiding client's assets
Now disbarred, former Willmar attorney Gregory Anderson pleaded guilty to fraud in hiding business assets of the former mayor of Kerkhoven in bankruptcy proceedings.
ST. PAUL — A disbarred attorney will serve a federal sentence of 18 months in prison for his role in concealing the business assets of a former Minnesota mayor in bankruptcy proceedings.
Ex-Willmar attorney Gregory Anderson, 63, was sentenced to the prison term on Wednesday, Dec. 7, during a court appearance in federal District Court in St. Paul. U.S. District Court Judge Eric C. Tostrud also ordered that Anderson serve one year of supervised release following his release from prison and pay a fine of $20,000.
The sentencing follows Anderson’s guilty plea on Aug. 8 to one count of fraudulent concealment of bankruptcy assets.
A plea agreement reached at that time included a requirement that Anderson be voluntarily disbarred.
The sentence is below the sentencing range that had been approved earlier in a plea agreement. It called for a range of 24 to 30 months of imprisonment at the discretion of the court.
Prior to sentencing, U.S. Attorney Andrew Luger and Assistant U.S. Attorney Jordan Sing supported the 24-month sentence, or the lower end of the agreement. In a filing with the court, they stated that Anderson’s remorse for his criminal conduct “appears thoughtful and genuine.”
They also described his criminal conduct as “rather extraordinary” and “remarkable.” They stated that a 24-month sentence “is necessary to reflect the seriousness of this offense, promote respect for the law, and provide just punishment for his actions.”
The sentence is the conclusion to an otherwise successful law career that began in 1987 when Anderson was sworn into the bar by his father.
Anderson filed a Chapter 7 bankruptcy petition on behalf of former Kerkhoven, Minnesota, Mayor James Rothers in November 2015. Rothers had approached Anderson for legal counsel in mid-2011 when one of his grain bin construction businesses, West Central Crane, was in a contract dispute and likely to be sued.
“Anderson spent the next four plus years helping Rothers hide assets and avoid liability,” the prosecuting attorney said in court filings.
The court found that Anderson created fake liabilities to create the appearance that Rothers was insolvent when, in fact, Rothers could easily have paid all of his creditors.
According to the court, Anderson arranged to have a fictitious lawsuit filed against Rothers, and then instructed Rothers to default in that lawsuit. It created a judgment of approximately $608,000 against Rothers to further the appearance that he was insolvent.
Anderson also created documents to make it appear that an Iowa company had loaned $240,000 to Rothers and that he had an obligation to repay what is now known to have been a bogus loan.
Overall, Anderson helped Rothers hide more than $1 million in assets in what the U.S. Attorney for the District of Minnesota called a “senseless attempt” to help Rothers discharge $173,591 in debts.
The fraud included Anderson’s help in hiding 100,000 gold coins Rothers had purchased as part of the scam. Anderson also helped place $465,640.26 in the bank account of ABS Bin of Minnesota, which Rothers falsely claimed that he did not own.
The attorney also helped Rothers in placing $227,284.26 in ABC Bin of Iowa. It’s from this business account that Rothers paid Anderson.
The attorney and Rothers also helped conceal $582,423 in cashed checks to Rothers’s businesses shortly after the bankruptcy filing. He also assisted in taking numerous vehicles and trailers out of Rothers’ name just prior to the bankruptcy filing, according to the prosecuting attorneys.
The fraud was discovered prior to any discharge of the debts. The case was the result of an investigation by the FBI.
Rothers' businesses have paid the creditors and, according to court documents, he has spent hundreds of thousands of dollars in legal expenses. He is scheduled for sentencing later this month on one count of fraud for concealment of bankruptcy assets. Rothers pleaded guilty Nov. 7, 2019, and has assisted investigators in the case against Anderson.