Former Kerkhoven mayor and Willmar’s lawyer face possible jail time over bankruptcy fraud – West Central Tribune | Vette Leader

ST. PAUL – The former mayor of Kerkhoven and the Willmar attorney who represented him are facing a possible jail term after reaching a fraud settlement in a Minnesota federal court.

James Alan Rothers, 56, who resigned as mayor of Kerkhoven in early 2017 amid controversy over a rezoning proposal and a tower he built, entered a plea agreement in November 2019 in the US District Court in Minnesota, agreeing to one charge Guilty of fraud pleads concealment of bankruptcy estate. According to information from Deputy US Attorney David MacLaughlin, he should be sentenced in December.

The offense carries a potential prison sentence of five years. According to the plea agreement, the sentencing guidelines range from 18 to 24 months in prison, but the sentence is at the discretion of the court.

Gregory Anderson

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Attorney Gregory Alan Anderson, 63, represented Rothers in a Chapter 7 bankruptcy filing. Anderson entered a plea agreement in federal district court Aug. 8 pleading guilty to one charge of fraudulent concealment of bankruptcy assets. A charge of conspiracy to commit mail and wire fraud would be dismissed.

His offense also carries a possible five-year prison sentence. According to Anderson’s plea agreement, sentencing guidelines range from 24 to 30 months in prison, but that too is at the court’s discretion.

As part of the agreement, Anderson agrees to be voluntarily disqualified from practicing law. He also agrees to testify truthfully at upcoming plea and sentencing hearings. Anderson began practicing law in 1987 but is currently retired.

Rothers filed with the court for Chapter 7 bankruptcy in November 2015. The indictment alleges that he and Anderson fraudulently withheld $1,242,484 in Rothers’ assets from the court.

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An undated photo of Jim Rothers, the former mayor of Kerkhoven who has pleaded guilty to fraudulently concealing bankruptcy assets.

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The indictment states that Rothers hid: $100,000 worth of gold coins in Fargo, North Dakota; approximately $686,000 in a deposit by ABC Bin Company with Northwest Bank of Iowa; and liquid accounts receivable in the form of uncashed checks totaling $455,484.25.

An original request for disciplinary action against Anderson accused him of having represented Rothers in a variety of business and personal matters since 2003.

“The defendant worked with Mr. Rothers to help Mr. Rothers conceal assets from his creditors and his wife,” the petition reads. It is alleged that “he knowingly misrepresented facts, knowingly and dishonestly omitted material facts and failed to take appropriate corrective action when the defendant was aware that Mr. Rothers had made material misstatements of fact before a court.”
According to federal court documents, Anderson created false liabilities to make Rothers appear insolvent, when in fact Rothers could easily have paid all of his creditors.

Specifically, Anderson caused a fictitious lawsuit to be filed against Rothers and then ordered Rothers to default on that lawsuit. This resulted in a judgment of approximately $608,000 against Rothers for appearing that he was insolvent.

Anderson also produced documents that made it appear that an Iowa company had loaned Rothers $240,000 and that Rothers was obligated to repay that loan. The loan was completely bogus and was created to bolster the appearance of Rother’s bankruptcy.

In Chapter 7 bankruptcy, a trustee liquidates a debtor’s assets, excluding some exempt assets, and uses the proceeds to pay creditors.

James Rothers is shown on the far right, as mayor, presiding over a meeting of Kerkhoven City Council in 2017 where his rezoning request and tower were the subject of debate.

James Rothers is shown on the far right, as mayor, presiding over a meeting of Kerkhoven City Council in 2017 where his rezoning request and tower were the subject of debate.

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The investigation that led to the charges against Rothers and Anderson followed a complaint filed in January 2017 by the trustee for the creditors involved in Rothers’ bankruptcy filing.

Attorney Richard Stermer of Montevideo accused Rothers of “hiding assets in bankruptcy on behalf of companies or with his partner Stephanie Voxland.”
Allegations against Rothers in federal court included allegations that he had invested assets in bogus companies and formed an offshore company on the island of Nevis in the Caribbean.

Rothers resigned as mayor just months into his tenure in 2017. He had taken the city to court over a 54-foot concrete tower he erected on his property off US Highway 12 in Kerkhoven. The city council had rejected his application for the rededication of the commercial property he had converted in which he had established himself.

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