Two former bank executives accused of fraud in the failed Ramsey Town Center project have reportedly struck a deal to plead guilty to a lesser charge.
William Garfield Sandison and his son, Ross William Sandison, are scheduled for a "change of plea" hearing on Aug. 26.
They now face one count of conspiracy related to bank fraud, court records show.
The Sandisons and another former Community National Bank executive, Curtis Alan Martinson, were indicted in April on charges ranging from conspiracy to mail fraud, misapplication of bank funds and money laundering. William Sandison is the former president of the bank and Ross Sandison was a vice president.
According to the 29-count federal indictment, they solicited $35 million in loans from 20 banks for the Ramsey Town Center project. The executives allegedly diverted some of that $35 million to repay their own loans without telling the banks involved in the project.
The Sandisons and Martinson were Community National Bank officials when they negotiated the $35 million loan with Bruce Nedegaard's Ramsey Town Center, LLC.
They then caused Community National Bank to syndicate the loan to a 20 bank participation, with Minnwest being the lead bank, money-wise, in the mortgage participation but with Community National trusted with continued servicing of the mortgage they'd originated (until Minnwest snapped the string on them when things started looking abnormal and criminal).
The indictment indicated there were side arrangements between the Sandisons, personally, with Nedegaard and his LLC, and that dealings between them were concealed from the other twenty banks while the Sandisons did some frontrunning on the other creditors, including the bank they ran.
They now cop to a single conspiracy to defraud count, each, despite the pattern of dealings that led to multiple counts in the indictment.
With the foreclosure of the $35 million mortgage released earlier from bankruptcy proceedings for the secured creditors to proceed in State court, and with the State court foreclosure suit resolved by the City's recent purchase of land that was being foreclosed, the result is City of Ramsey acquired title to half the site; all of which is unbuilt but with infrastructure in place. The foreclosure was independent of the City Hall and parking ramp lands, because they had previously been released from the mortgage.
Also outside of the foreclosure is the lego-land housing along Ramsey Blvd., and townhomes upon other parts of the project; while Town Center Gardens across Hwy 116 is a wholly separate and independent project, money-wise and title-wise, although on the ground it all looks contiguous [all those beastly ugly townhomes on both sides of Hwy. 116 looking generally alike but not as beastly bad as the Turtle Moon stuff that got put on the South side of Highway 10, which wins the prize as the ugliest housing in town].
As to the saying, "prudent as a banker," the banks merrily released half the 322 acres from mortgage coverage without any principal of the $35 million debt being paid down. Go figure.
And we still don't know who the beneficial ownership rests with for those two Swiss bank accounts that the bankruptcy file indicates were funded by Bruce Nedegaard before being put into bankruptcy in late November 2006 [after the elections].
Not all loose ends are tied. The train stop uncertainty being paramount. But at least prosecution of wrongdoing is being moved to closure.
_________UPDATE________
PiPress, BizJournal, and MinnPost have parallel coverage; respectively here, here and here. The PiPress item talks at the opening of a "$1.3 million" Town Center project; whereas the puffing was that built out it might be $1.3 billion - perhaps an insignificant error, given the actual story, and given that the "Billion dollar urban village" was Feges-speak, to be taken with a grain of salt. But PiPress gets the $35 million mortgage loan amount correct, and inconsistent with a $1.3 million project. BizJournal and MinnPost reference PiPress coverage as their source, with BizJournal being more detailed than the MinnPost blurb and link. ABC [ECM] Newspapers apparently have yet to report, as weekly publications, with one of their networked local papers serving North Branch, home of the originating bank, and home of the Sandisons.