Trial date set in animal shelter funds lawsuit
Published 10:46 am Thursday, October 23, 2014
John Billington of the Minnesota Department of Insurance Fraud Prevention carts boxes of files in June 2010 from Albert Lea Abstract into a U-Haul truck parked on Washington Avenue. – Tim Engstrom/Albert Lea Tribune
Former commissioner gambled away donation
Money meant for expanding an animal shelter in 2010 but gambled away by a county commissioner at an Iowa casino now is at issue in a trial stemming from a civil lawsuit.
Linda Tuttle
The trial has been scheduled for June.
Former Albert Lean Steve Leuthold, the Steve Leuthold Family Foundation and the Freeborn County Humane Society are suing American Bank of St. Paul for damages and an undetermined amount but in excess of $50,000.
American Bank held an escrow account through the now-closed Albert Lea Abstract, then owned by Linda Tuttle, until the animal shelter addition was to be built. Tuttle at the time was a Freeborn County commissioner representing District 5.
Leuthold had donated $50,000 to the project and the foundation had given $100,000.
The money never made it back to the nonprofit organization after Tuttle was arrested in June 2010 and ultimately admitted to taking more than $1 million in funds from Albert Lea Abstract escrow accounts at various banks and diverting them to her own purposes, most of which supported a gambling addiction. Court files show she frequented Diamond Jo Casino in Northwood.
Tuttle in April 2011 pleaded guilty to wire fraud in U.S. District Court in Minneapolis and was sentenced to 3 1/2 years in federal prison. She served her sentence at a federal prison in West Virginia and has returned to civilian life.
The lawsuit argues that American Bank of St. Paul, which held the escrow account for the Humane Society project, had knowledge of Tuttle’s fraud scheme, according to court files. Documents claim the bank allowed the misappropriation of funds to continue, even after having knowledge it was taking place.
The account was included in the bank’s suspected check kiting report for almost six months at the time the Leuthold donation to the Humane Society was deposited and had negative balances, court records state.
American Bank lawyers have argued no one at the financial institution had actual knowledge of the fraud scheme or had acted in bad faith.
Freeborn County District Court Judge Steve Schwab at the end of September denied a motion from American Bank for summary judgment, which would have allowed him to make a judgment without the case going to trial.
On Tuesday the trial was scheduled to begin June 2. That date could change should motions delay the case or if a settlement is reached.
The loss of the Humane Society donation fueled public outrage in the case. With assistance from community donations, however, the Humane Society eventually raised funds and began an expansion of the animal shelter in June 2011.
