Complaint filed against East Grand Forks City Attorney for role in Boardwalk Enterprises money laundering scheme
Complaint alleges Ronald Galstad legally represented City of EGF and Boardwalk simultaneously
by Timothy Charles Holmseth on August 15, 2016, 11:36 A.M. CST
Ronald I. Galstad, the attorney contracted by the City of East Grand Forks, Minnesota is the subject of a formal complaint filed to the Minnesota Lawyer’s Professional Responsibility.
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| EGF City Attorney Ronald Galstad |
Timothy Charles Holmseth August 15, 2016 Lawyers Professional Responsibility Board Dear Board, This complaint is against Attorney Ronald I. Galstad. Galstad is an attorney licensed to practice in the state of Minnesota. Galstad has a private practice that contracts to represent the City of East Grand Forks, Minnesota. Clear and convincing evidence exists to show Galstad is in violation of; but not limited to:
STATEMENT Evidence shows Attorney Ronald I. Galstad provided legal representation to Boardwalk Enterprises, Boardwalk Bar & Grill (hereby referred to as “Boardwalk”), and the City of East Grand Forks, Minnesota, at the very SAME time; in the SAME meeting; regarding the SAME matter. On May 7, 2014 Galstad was the attorney for the City of East Grand Forks, Minnesota. Boardwalk and City of EGF were adversaries during the meeting, and two years later Boardwalk filed a civil lawsuit against City of EGF. The may 7, 2014 meeting was held in response to an audit that discovered Boardwalk had not repaid a loan from the East Grand Forks Economic Development and Housing Authority. On April 30, 2014 the Grand Forks Herald reported “$510,000 loan from City of East Grand Forks to Boardwalk Enterprises goes unpaid for 10 years.” OVERVIEW - THE BOARDWALK ENTERPRISES SCANDAL The Boardwalk Enterprises scandal involves what was clearly fraud and financial crimes comprised of a conspiracy by public officials and well placed individuals (family, friends, etc.) to steal over one half million dollars of government money using a scheme devised to loan money from the Economic Development and Housing Authority (EDHA) that came from a federal Community Block Grant Fund; and then not pay it back. The original plan was basic and simple – loan the money; use people on the inside of the city government (e.g. EDHA Director, City Attorney, etc.) to eliminate the paper trail and make all existence of the loan disappear so no payments would be required; then, use the money to build a huge lucrative entertainment complex in East Grand Forks called ‘The Boardwalk’ and become personally rich with profits. Grand Forks Herald publication records show that in 2011 the building was owned by Dan Stauss; he is the brother of EGF Mayor Lynn Stauss. The Boardwalk scandal was a highly publicized ongoing news story and troves of information can be found regarding the matter on the Web. ILLEGAL MEETING and CRIMINIAL CONSPIRACY On May 7, 2014 WDAZ-TV reported that David Murphy, administrator, City of EGF, told a reporter that city officials met with “representatives” of “Boardwalk Enterprises” and their “attorney”. WDAZ reported the May 7, 2014 closed door meeting was held at the private office of EGF City Attorney Ronald Galstad (as opposed to EGF City Hall) at the Boardwalk complex to discuss the un-paid loan. All available evidence shows Galstad was the ONLY attorney at the meeting between the two Parties. In a letter dated July 27, 2016, responding to a public records request, Administrator Murphy told me the City of EGF did not keep minutes or a record of who attended the May 7, 2014 meeting because there was not a quorum present and it was an “informal” meeting. The only attorney reported by WDAZ to be at the May 7, 2014 meeting was Galstad. I allege Galstad was the attorney for BOTH the City of EGF and Boardwalk during the May 7, 2014 meeting. The May 7, 2014 meeting was nothing less than criminal and conspiratorial activity by participants deeply involved in state and federal crimes. The secret meeting, which clearly violated the Minnesota Open Meeting Law, involved proactive efforts of EGF City officials, City Attorney, and the City Administrator to form a game-plan how to avoid prosecution for fraud against the State of Minnesota and the U.S. government. Records show the City of EGF city council knew the activity was illegal. On May 27, 2014 Boardwalk requested all documents the City of EGF possessed regarding the un-paid $510,000 loan. On May 27, 2014 Galstad gave a presentation to the EGF EDHA board during a public meeting. He gave a summary rundown of what his internal investigation had determined thus far regarding the un-paid loan. The fact-pattern exposed through Galstad’s presentation created enormous questions, because files showed crucial documentation regarding the loan simply did not exist – as if all traces of the loan had simply disappeared. Essentially – Galstad had been allowed by the EGF city council and City Administrator to conduct an investigation of himself. That fact is demonstrated by the actions of City of EGF city council on June 3, 2014. On June 3, 2014 WDAZ reported the East Grand Forks city council voted to hire Attorney Brad Sinclair to represent EGF regarding the unpaid loan. Sinclair replaced Galstad for purposes of the ‘Boardwalk’ issue. “This is just for removing any questions of conflict of interest or just to get a neutral third party to look at it.” Administrator Murphy said. The aforementioned action by the EGF city council and statement by Administrator Murphy to the media shows the City of EGF factually knew there was a ‘conflict of interest’ issue and Galstad was not a “neutral” party. Therefore – between April 30, 2014 and June 3, 2014, the City of EGF (city council and staff) and Attorney Galstad factually knew there were conflict of interest issues and all Parties conspired to conceal that information from the public and law enforcement. ATTORNEY GALSTAD REMAINED INVOLVED Evidence shows the hiring of Attorney Sinclair to represent City of EGF regarding Boardwalk did not keep Galstad from being involved. Two years later, on June 7, 2016, the Grand Forks Herald reported Boardwalk filed a lawsuit against the City of EGF regarding Boardwalk Enterprises. On Jun 7, 2016 Ronald Galstad (acting as City Attorney) declined to turn a copy of the lawsuit over to the media and stated it had been submitted to the League of Minnesota Cities for insurance purposes. “And then the league, we're anticipating, will assign it to an attorney to represent us," Galstad told the Herald. The Herald further reported on June 7, 2016 that Mark Anfinson, the attorney for the Minnesota Newspaper Association, said the city is "definitely required to provide a copy of the summons and complaint upon receipt, regardless of whether they've been filed with the court." He cited a section of Minnesota's Government Data Practices Act. Therefore, Galstad, having received an official document/communication on behalf of the City from Boardwalk and their attorney, refused to turn it over to the media. Thus – he is engaging in blatant obstruction while continuing to attempt to create the false appearance that he is not involved. Evidence show Galstad was HEAVILY involved. Galstad was clearly involved in negotiations regarding a pending settlement. On June 28, 2016, the Herald reported “City Attorney Ron Galstad cited a "short timeframe to draft up all the settlement documents to get approval." The City Council met in a closed-door meeting Monday evening to discuss a possible settlement. "We just weren't able to do it, to finalize it today," Galstad added. "There is a settlement agreement being drafted right now." On June 29, 2016 the Herald reported, “The council approved a settlement agreement that stipulates Boardwalk Enterprises, the entity that owns the commercial building at 415 Second St. N.W., and Boardwalk Bar and Grill pay $250,000 in cash. City staff members first said in April 2014 a $510,000 loan to Boardwalk Enterprises went unpaid for more than a decade.” The Herald further reported, “In a joint news release, the city, the EDA, Boardwalk Enterprises and Boardwalk Bar and Grill said they were "pleased to announce that they have resolved all disputes between them." "The settlement is based on all parties recognizing the expense and risks of not bringing their disagreements to a close," the brief statement added. GALSTAD IS PAID On August 7, 2016 the Herald reported, “The legal costs detailed in the city spreadsheet show $33,142.12 was paid to the Kaler Doeling law firm, from which the city hired attorney Brad Sinclair, as well as $25,117.99 to City Attorney Ron Galstad. Another $10,444.85 was labeled under "appraisal and consulting.” Galstad was actually paid fees to commit and conceal felonies. Galstad has defrauded the local tax-payers as well as the state and federal government. The “risks” that were noted by the City and Boardwalk are concerns over criminal prosecution for fraud by involved public officials. The actors in this crime have not been required to pay back over a quarter of a million dollars from the original $510,000 that was stolen from the taxpayers from government funds. The settlement agreed upon required Boardwalk to pay $250,000. However, nearly $70,000 in legal fees were paid out by the victim-public-taxpayers to the predator government officials to pay for attorneys – including an attorney (Galstad) who was/is involved in the crimes. The ‘settlement’ is illegal because upon an investigation, the true facts and circumstances surrounding the ‘settlement’ shows both Parties used a ‘settlement’ to avoid criminal prosecution. Galstad is deeply involved in state and federal crimes that warrant a thorough investigation, which I am hereby requesting. Respectfully submitted,
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