Former Fagen CFO used fake ethanol company to embezzle $4.5 million
MINNEAPOLIS—A former CFO at Fagen Engineering created a fictitious ethanol company in Nebraska called Fairmont Investments LLC to help her allegedly embezzle $4.5 million from her employer's company.
Kirsten Tjosaas, 38, of Granite Falls used the monies that she allegedly embezzled from Fagen Engineering of Granite Falls to purchase properties in her and her husband Jeffrey's name, according to documents recently filed in federal district court in Minneapolis.
Tjosaas admitted to embezzling the monies in an interview conducted by Federal Bureau of Investigation agents at her home in Granite Falls on February 2, according to the documents.
She also signed an order allowing the federal courts to freeze the assets in advance of possible criminal charges against her. Criminal charges have not been filed at this point.
"Tjosaas told agents that she had used the money to purchase homes, cars, and other assets,'' stated the document. She estimated the value of the assets she purchased with the embezzled funds to be approximately $3.5 million to $4 million, it stated.
The properties are located in the states of Arizona, Florida, and Tennessee as well as Minnetonka, Granite Falls and Stony Run Township in Yellow Medicine County in Minnesota.
Tjosaas created the fictitious company Fairmont Investments LLC., c/co Kirsten Tjosaas in February 2006.
She began working in the accounting office of Fagen Engineering in 2004, became a corporate controller in 2007 and promoted to Chief Financial Officer in December 2013. Her employment was terminated in November, 2015.
In late December, "Fagen accounting personnel discovered several suspicious transactions involving a company called Fairmont Investments,'' the court documents state.
According to the documents, Tjosaas opened an account in the name of Fairmont Investments at the Granite Falls Bank in February 2006. She deposited checks she wrote from Fagen to Fairmont in the Fairmont account. Bank records show that she then transferred the funds from those checks to her own personal accounts at the Granite Falls Bank, according to the allegations filed in federal court.
She also transferred $276,237 to Company A and Company B, which allegedly were accounts for a painting company. Jeffrey Tjosaas operates a painting business.
The investigation tracked checks written from 2007 through 2014 in amounts ranging from $30,000 to $100,000 to $300,000 and $400,000. Investigators allege that she entered false statements in Fagen Company records for the checks.
A $100,000 check was listed as an advance payment to a Fagen shareholder. A $400,000 check was falsely recorded as a payment on a Fagen company insurance policy. Fake entries were made in Fagen's accounting records to "disguise'' some payments as having been made to vendors for Fagen.
The $4.5 million is based on the investigation to date. Investigators believe that additional funds embezzled from Fagen will be identified as additional records are obtained, the documents state.
Representatives from Fagen confirmed that the company has never conducted any business with Fairmont Investments, LLC. Of the $4.5 million investigated to date, "none of the these checks or transfers represented legitimate payments from Fagen,'' stated the court document.
Records obtained from the Nebraska Secretary of State indicates the company was formed by several individuals, including Tjosaas, to invest in an ethanol project in Fairmont, Nebraska.