Longtime Minnesota fraudster accused of operating fake law firm
Gale Rachuy, 72, of Duluth is accused of swindling $2,500 from a client who believed he was a longtime attorney working with prominent judges.
DULUTH — A Duluth man who was once described by a judge as the “epitome of a white-collar career offender” has been arrested by federal authorities and accused of operating a fake law firm that swindled at least one client out of $2,500.
Gale Allen Rachuy, 72, made an initial appearance Wednesday, Dec. 14, in U.S. District Court after a grand jury returned an indictment charging him with wire fraud.
Rachuy, whose criminal history includes more than 30 felony convictions, is accused of representing himself as a lawyer with 38 years of experience at a fraudulent Duluth-area firm known as Midwest Legal Services.
The indictment alleges that Rachuy accepted and later refused to refund a retainer fee provided by a victim who had contacted him for assistance in filing a post-conviction motion. He allegedly claimed to employ several attorneys, including retired judges from the 7th U.S. Circuit Court of Appeals and Hennepin County District Court.
While authorities did not name the victim, the indictment is consistent with an account previously provided to the News Tribune by James B. Mitchell, of Fayetteville, Arkansas.
“He lies to his victims that he is an attorney when, in reality, he has never even graduated from any law school, and his only legal knowledge has been acquired by spending time in law libraries at the numerous federal and state prisons he has been incarcerated at over the course of his whole adulthood in the past 50 years,” Mitchell said.
Mitchell and the indictment both state that Rachuy requested a $10,000 retainer fee to be paid in installments. The victim issued the first $2,500 transfer March 15.
“The next $2,500 installment was due two weeks later on April 1, 2022, which I did not pay because of too many red flags in that two weeks giving me reason to suspect Rachuy was scamming me,” Mitchell said. “In particular, he refused to provide me with proof that either retired judge was licensed to practice law or was contracting with Midwest Legal Service.”
Rachuy, who never provided a draft of the legal documents he promised, later told the victim several times that he would refund the money, but never did so and claimed the former judges were still working on the matter, according to the indictment.
“I am grateful for the diligence and the coordinated work of the FBI, the Duluth Police Department and the St. Louis County Attorney’s Office for investigating the defendant’s long history of repeated and unrelenting fraudulent conduct,” Andrew Luger, U.S. Attorney for the District of Minnesota, said in a statement.
Rachuy’s exploits have previously been documented by the News Tribune, most recently in 2012 when he was sentenced to 7 ½ years in federal prison after pleading guilty to interstate transportation of a stolen motor vehicle.
At the time, he had been charged in at least 56 criminal cases involving more than 90 counts of theft and swindling in Minnesota alone dating back to the early 1970s.
Representing himself, he was sentenced in State District Court in Duluth in 2011 to five years — the statutory maximum — after a jury convicted him for writing a dishonored $14,000 check to Duluth Lawn & Sport.
Among other cases, in 1990, while being held in the St. Louis County Jail on charges of felony theft, Rachuy reportedly tried to buy $11,000 of furniture over the phone by representing himself as an executive with the fictitious "Industrial Credit" of Minneapolis. Delivery of the furniture was scheduled when the furniture dealer saw a newspaper report on the charges against Rachuy.
Other cases involved charges of accepting significant down-payments for log homes and additions with no intention of following through, and of buying motor vehicles, fireworks and wedding rings with worthless checks.
Rachuy, known to carry a manilla folder containing pages of his past convictions, has repeatedly claimed that law enforcement, prosecutors and judges are targeting him based on past convictions. If he’s a con man, he told the News Tribune in 2011, "I'm not a very good one."
"I'm not (a con man)," he said. "But if you turn around and talk to a prosecutor, they would probably tell you yes."
Federal prison records show that Rachuy was released from his most recent sentence in May 2020. He was apparently on some form of release in 2017, when he was charged with writing more than $1,200 worth of dishonored checks to Fleet Farm in Hermantown. Rachuy filed a motion in that case asserting that the prosecutor should herself be prosecuted before he was sentenced to 90 days in jail.
Rachuy is being held without bond in the Douglas County Jail. He faces an arraignment and detention hearing before U.S. Magistrate Judge Leo Brisbois in Duluth on Monday.