An Albert Lea insurance agent who faces theft charges in connection with apartments he managed pleaded not guilty Thursday in Freeborn County District Court.

In addition, Reid Nelson’s lawyer moved to dismiss the case for a lack of probable cause. The motion came during a contested omnibus hearing.

Thomas Kraus of Waseca argued that Nelson, as tmanager of the Townhouse Apartments, had the right to set his own wages.

“There was nothing secretive or hiding about what kind of wages he was going to pay himself,” Kraus told Judge Steven Schwab.

In addition, he said there is nothing in the police investigation — a 400-page document submitted Thursday as Exhibit 1 — to show Nelson sought to permanently deprive the owners of the Townhouse Apartments of their money. The owners at the time were Ralph Peterson and Reid’s father, Roger Nelson.

Kraus also questioned why the alleged theft was prosecuted as six counts, rather than one.

Nelson faces six counts in relation to $31,857 the prosecution says he stole. Each count has differing dates and dollars and, depending on the dollar amounts, differing penalties. Five of the six are felonies:

April 26, 2007, through Sept. 31, 2007, $6,144.22, a maximum punishment of 10 years in prison and a $20,000 fine.

Oct. 1, 2007, through Dec. 31, 2007, $3,450, a maximum punishment of 10 years in prison and a $20,000 fine.

Jan. 1, 2008, through June 30, 2008, $7,100, a maximum punishment of 10 years in prison and a $20,000 fine.

July 1, 2008, through Dec. 31, 2008, $4,825, a maximum punishment of five years in prison and a $10,000 fine.

Jan. 1, 2009, through June 30, 2009, $9,712.70, a maximum punishment of 10 years in prison and a $20,000 fine.

One count is a gross misdemeanor:

July 1, 2009, through Sept. 30, 2009, $625, a maximum punishment of one year in prison and a $3,000 fine.

He said he understands how prosecutors will break up a case into many charges to heighten the severity.

“The logic is to do arm twisting and that’s not appropriate,” Kraus said.

He said the time frames seemed random: five months, three months, six months, six months, six months and three months. He asked to dismiss all charges, and he requested, if the case goes forward, to consolidate the charges into a single one and “not a shotgun approach.”

Steele County Assistant Attorney Christy Hormann told the court the statute gives her the discretion to divide the allegations into multiple counts.

“I could have charged each check as a separate count,” she said.

She said the key issue is the time frame — three years. She decided to keep the charges generally into six-month segments, with a shorter first year and a shorter last year.

“I don’t think that there is any arm twisting,” Hormann said.

As for the wages for managing the apartments, the probable cause statement said there was an agreement Nelson receive $300 a month. In court, Hormann said it was a “gentleman’s agreement” for $300 to $400, affirmed by Nelson’s confession to Albert Lea Police Department detective Deb Flatness.

She said he wrote numerous checks for thousands of dollars and cashed them at The Nasty Habit and Aragon bars.

“Clearly the endorsement on those checks has nothing to do with the business of the Townhouse Apartments,” Hormann said.

She said the length of time shows there is no evidence of repayment attempts. He wrote Townhouse Apartments payments to Peterson and his father — more to his father than to Peterson. When asked about the amounts, he reportedly told the Peterson family the apartments were not full. She said occupants told investigators the apartments were full all the time.

She said any intention to repay was not acted upon.

“His intention changed when he was sitting in the room with detective Flatness,” Hormann said.

Kraus asked how much of the $31,857 was justifiable pay or money for apartment repairs.

Hormann said the total loss is about $50,000.

“The disparity is there and accounted for,” she said.

And Kraus asked: “How does someone violate a gentleman’s agreement and face criminal charges?” He noted Nelson had “open, broad discretion.”

Hormann said the defendant himself told the detective what his pay was to be.

Kraus said Nelson managed the place for 10 years. He asked how many people have the same wages for service for 10 years. He said as the owners became incapacitated with age, he had the discretion to give himself wage increases.

Kraus, on behalf of Nelson, requested a jury trial and waived the right to a speedy trial.

Schwab said he would read Exhibit 1 and issue a ruling on the motion to dismiss.

A Steele County prosecutor is handling the case because Nelson is the brother of the Freeborn County attorney.

In a separate case, Nelson faces an insurance fraud charge and an aggravated forgery charge, both felonies. These charges stem from the insurance agency he works for, Strong Agency Inc., allegedly failing the insure liability for a construction company even though payments were made.

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