Former executive to serve 78 months for $5.7 million embezzlement from Minn. company

ST. PAUL -- A former executive for a Minnesota-based industrial contracting firm will serve a 78-month sentence in the federal prison system for embezzling over $5.7 million over eight years from her former employer.

ST. PAUL -- A former executive for a Minnesota-based industrial contracting firm will serve a 78-month sentence in the federal prison system for embezzling over $5.7 million over eight years from her former employer.

U.S. District Judge Donovan Frank sentenced Kirsten Tjosaas, 38, on Tuesday to the maximum sentence as recommended by federal guidelines for her convictions on federal wire fraud and money laundering charges.

The former chief financial officer for Fagen Inc. of Granite Falls and the mother of two young children, Tjosaas asked the court for leniency. Her attorney, Timothy Webb of Minneapolis, argued for 30 months in prison, a downward departure from sentencing guidelines. Webb stated that her scheme to steal the money was not intricate, and that it represented aberrant behavior in the life of an otherwise “productive, law-abiding, contributing member of society,’’ according to court files.

Tjosaas has accepted responsibility for her actions and cooperated in turning over to the government property acquired with the stolen money, according to her attorney. The sentence requires that she make full restitution of $5,773,410.

A packed courtroom including many of her former co-workers heard Tjosaas apologize for what she termed her “disgusting’’ behavior, according to Joseph Dixon, an attorney representing Fagen Inc.


Ron Fagen told the court that the Fagen companies run with a trust like a family, Dixon said. “This was a real blow to that trust and how the Fagen business operates,’’ Dixon said Fagen told the court.

In court papers, U.S. Attorney Andrew Luger told the court that her scheme was intricate, involving the movement of fraudulent checks into a false account she established and the use of another employee’s signature stamp to endorse the checks without that employee’s knowledge.

Tjosaas was earning a $240,000 salary when she was fired in November 2015 as CFO. She was taking an average of $50,000 a month from her employer, prosecutors told the court in motions asking for the recommended sentence.

The U.S. Attorney told the court that Tjosaas abused the trust and responsibility her employer placed in her “in order to enrich herself and fund her extravagant lifestyle.’’

She used much of the money to purchase real estate in Minnesota, Florida and Arizona and timeshares in the U.S. Virgin Islands. She also purchased at least three automobiles, two all-terrain vehicles, a motorcycle, a jet ski, and a sailboat.

Tjosaas spent over $2 million on credit cards from 2007 through 2015, of which $1.5 million was spent on an American Express card from June 2011 to January 2015. The charges included $346,000 in airline tickets; $213,000 on hotel rooms, $118,000 on jewelry; $112,000 on sports and music tickets; $92,000 on clothing and apparel; $91,000 on restaurants; $75,000 on furniture; and $43,000 on timeshare fees.

“Many of these expenses relate to Tjosaas’s near non-stop travel,’’ stated Luger. She spent her time between Minnesota and Florida, and regularly flew around the country on vacation and to attend sporting events and music concerts. Her travels included trips to Europe, St. Lucia, St. Maarten, the U.S. Virgin Islands, Puerto Rico and several states.

According to information from the U.S. Attorney’s office, between 2006 and November 2015, Tjosaas issued at least 19 checks and made wire transfers totaling approximately $4.5 million from Fagen to Fairmont Investments LLC, a Nebraska-based corporation controlled by the defendant.


According to her guilty plea, after registering Fairmont, Tjosaas opened a bank account at Granite Falls Bank in the name of Fairmont for the purpose of embezzling money from Fagen. She signed these checks using the signature stamp of another Fagen executive without the authority or knowledge of that executive.

Tjosaas also entered false entries into Fagen’s general ledger to disguise the illegitimate checks as payments to Fagen partners or payments to legitimate Fagen vendors. After depositing checks into the Fairmont account, Tjosaas transferred the funds she had stolen into her own personal bank accounts.

According to her guilty plea, Tjosaas also fraudulently issued Fagen checks payable to another company. Tjosaas had access to and control over the bank account of this company. Between June 2006 and November 2015, she issued approximately 25 fraudulent checks into this account, totaling more than $1.2 million.

How much of the restitution owed by Tjosaas can be obtained from the sale of the forfeited property is not yet known. Most of it has not been sold by the government yet. Dixon said Tjosaas will likely be making restitution payments for the remainder of her life.

He said the Fagen family was “gratified by the hard work of the investigators and prosecutors and felt the judge imposed a fair sentence.” “The main thing now is the sentence is done and Fagen Inc. is moving forward. Business moves on,’’ said the attorney.

The thefts came to light due to the work of a controller who had been hired by Fagen Inc. shortly before Tjosaas was fired. Ron Fagen credited Breanna (Huls) Kosminskas with discovering the thefts. Dixon said she identified payments that seemed “odd,’’ and did some research before calling in assistance that helped unravel the case.

The case was prosecuted by Assistant U.S. Attorney Joseph Thompson.

Related Topics: CRIME
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