OWATONNA — The Ellendale man accused of burning down his house in December 2011 had almost $430,000 in financial liabilities at the time of the fire, according to a forensic accountant who testified Monday morning in Steele County District Court.

Jason Olson of Eide Bailly, a certified public accounting firm, said he believed Mark Allan Misgen, 43, and his wife, Sara, 41, were experiencing financial pressure leading up to Dec. 7, 2011, when their house was destroyed by the blaze.

Their liabilities included everything from a $143,000 loan for purchasing Mystic Pizza in Lonsdale and more than $120,000 remaining on the mortgage for their house, to delinquent sales taxes, property taxes, education loans, child support payments, restitution and utility payments. Several balances had been sent to collections agencies.

Olson reviewed personal and business bank records for the Misgens particularly from July through December of 2011, along with credit reports, utility statements and other records obtained through subpoenas for the trial before issuing the opinion.

He testified that the Misgens had multiple accounts at three different banks and said he found evidence of at least 72 transactions involving check kiting that totaled about $33,000.

When he studied the utility records for the couple, he said he found that their utility bills were either delinquent or only partly paid each month. The gas to their home had been shut off in June of 2009 because of nonpayment.

Olson said in previous cases where he has seen a similar pattern, the only way to get out of the cycle is to have new revenue.

Misgen’s lawyer, Richard Swanson, questioned whether the couple had ever filed bankruptcy.

Olson said they had not.

Swanson also questioned the insurance claim the Misgens filed after the fire in relation to their debt.

He said the Misgens’ insurance claim was for about $395,000, and if they had more than $420,000 in debt, that would still have left them behind by more than $30,000.

Misgen faces charges of arson and insurance fraud tied to the fire at the family’s home at 403 W. Fifth Ave.

Misgen’s wife was previously charged with aiding and abetting in the case, but last week pleaded guilty to issuing a dishonored check in exchange for dismissing her two charges tied to the fire.

 

A letter to authorities

James Michael Johnson, Misgen’s co-defendant in a Dakota County case of credit card theft, said he heard about the fire at Misgen’s home through a phone call from his parents in January 2012.

Johnson, who at the time was serving as an inmate in an Arizona prison, said the minute he heard about the blaze, he knew he should write a letter to the Steele County Sheriff’s Office about a conversation the two men had in 2007.

Johnson said Misgen asked him what he knew about fire investigations, insurance fraud and how the insurance system works. Johnson had previously taken fire science classes and worked on an ambulance crew for several years.

At first, Johnson said he didn’t think anything of the comments but then “something rang a bell about the conversation we had.”

He said he wanted to do “the right thing” and tell authorities.

The two men had been riding around in Misgen’s truck in Minneapolis in 2007 when the conversation took place.

Swanson questioned whether anyone else was present.

Olson and Johnson were the two remaining witnesses to testify for the Steele County Attorney’s Office.

Misgen and Johnson were convicted in 2009 of using customer credit card numbers in the creation of fake credit cards.

Dakota County court files said Misgen and Johnson made fake credit cards using the card numbers of customers, then purchased $20,000 in gift cards, electronics and other goods in Burnsville in November 2007. The files said the six victims had done business at M&S Auto in Ellendale.

Among other requirements of his sentence, Misgen must stay away from Sears stores.

 

A motion to deny

At the conclusion of the prosecution’s witnesses, Swanson motioned Steele County District Court Judge Joseph Bueltel to order a directed verdict because he did not believe the prosecutors submitted sufficient evidence to satisfy their burden of guilt. A directed verdict would have rendered Misgen not guilty.

Bueltel denied the motion and said he believed there was sufficient evidence to move the case ahead.