Trail of deception, swindling leads to MN
A man who had proposed to buy and remodel the former Shopko building in Ellsworth into an aquaponics facility has been charged with felonies in two states related to business theft.
Bruce Phillip Carman, 64, Alma, was charged Sept. 12 with felony theft – false representation in Pierce County Circuit Court. If convicted, he faces up to six years in prison and/or fines up to $10,000. He is scheduled for an initial appearance at 9:30 a.m. Oct. 24.
Carman is also charged in Chisago County District Court with felony theft by swindle.
Carman is listed as the Chief Ex- ecutive Ovcer of Controlled En vironmental Farming, Inc. He had proposed purchasing the former Shopko building at 598 W. Lucas Lane and remodeling it into an indoor aquaponics facility, where he said he planned to germinate and hatch, cultivate, harvest, process, package and distribute fruit, hemp, herbs, vegetables, fish and shrimp. Ellsworth Plan Commission gave the project plan the green light in February, but it never materialized and the building sale was never fi nalized.
He had also said the facility would include a daycare center for up to 50 children and a classroom space for area school districts.
According to the Pierce County complaint, Carman began making inquiries about the vacant Shopko building in November 2021. He had a closing date scheduled for June 2022, but it failed to happen.
In July 2022, he hired three employees for the business: Manuel Valido for $150,000 per year plus 1.5% commission to handle financ es, Amelia Wenzel for $75,000 per year to head child care and transition to manager of operations, and Paula Reed to assist with child care operations part-time until January 2023, when she would transition to full- time. The Shopko building owner's attorney told police that Carman is allowed access to the building, although he was only in the process of purchasing it.
On Aug. 4, 2022, Brent Langer of Feuerhelm Langer Accounting Ser – vices (367 W. Main St., Ellsworth) said Carman contacted his ovce in March 2022 for a payroll service quote. He didn’t hear back from Carman until June 22, 2022, when he decided to set up an account with them. He went to the Feuerhelm Langer ovce at 1 p.m. July 20, 2022, at which time they discussed payroll set up. Langer said Carman requested the payroll service begin July 29, 2022 in the amount of $7,513.77. He had said there was a delay in working on the building due to a power grid issue.
Langer found out Aug. 1 that Carman’s bank account was closed and Feuerhelm Langer was out the $7,513.77 plus a $600 set-up fee un less a wire transfer of the funds was submitted by 2 p.m. that day. One of Langer’s employees communicated back-and-forth with Carman by email and phone that day; he at one point told her he was at Wells Fargo doing a wire transfer. Feuerhelm Langer was given an extension until 2:30 p.m. to get the funds, but Carman never produced them.
CCF Bank confirmed Carman's account from which the payroll was supposed to come was closed. Carman later admitted that he had only $13 in his personal bank account, $25 in his CCF business account and $6 in his WESTconsin Credit Union account.
Police found no evidence of money coming from investors as Carman claimed.
On Aug. 9, police made contact with Wenzel, who stated she was at the Shopko building with Carman. When Ellsworth police arrived, Carman appeared to be having a meeting with Wenzel and another woman. He told ovcers he would fix the payroll problem after opening up a new business account at WESTconsin. Police Chief Eric Ladwig arrested Carman for warrants out of Ashland County in Wisconsin and Chisago County in Minnesota and transported him to Pierce County Jail.
Carman’s employees said they were told he owned the building at 598 W. Lucas Lane.
His finance director said the only money they had coming in was $845,000 from a refinance of the building, which turned out to be false since Carman had never purchased the building.
Carman later told police that his partner, with whom he lives in Alma, has been sup- porting him financially. He estimated he had about $13 in a Chime bank account and $13 in a GreenDot account. Police spent the next two days contacting lending services Carman had mentioned and learned that many letters of intent had been sent, but no terms had been set up. Carman would have had to have come up with cash on his end prior to receiving any investor monies.
In an interview with police Aug. 11, Carman was vague about investors and how he would be provided money to make good on the payroll. He again mentioned the $845,000 and the ovcer reminded him that he didn't own the building, therefore couldn’t use it as collateral.
On July 5, CCF Bank had informed Carman that his account would be closed because he attempted to purchase a $100,000 RV through the account, which only had $25 in it. The RV dealership asked Carman to return the RV, but he refused. Dealership employees had to recover it. Police obtained a search warrant for Carman’s vehicle on Aug. 9. Inside they found the purchase agreement for the $110,000 RV and letters of intent from potential investors.
On Oct. 18, 2018, a felony theft by swindle charge was filed against Carman, who listed Lutsen, Minn. as his address at the time. If convicted, he faces up to 10 years in prison and/or fines up to $20,000. According to the complaint, a salesman at a fiberglass fabrication company in Chisago County provided Carman with several esti- mates on fiberglass tanks from 2014 to 2017. The fiberglass tanks were supposedly for an aquaponics operation.
In November 2017, Carman contacted the salesman for an estimate on a tank to be used in an aquaponics operation in Thunder Bay, Canada called Controlled Environmental Farming. Carman told the salesman the project was on the “fast track” and was partially funded by the Canadian government. He also said an investor had recently died and he had an opening for a new investor. On Nov. 10, 2017, the salesman agreed to be an investor and wired $15,000 to Carman’s Security State Bank account in exchange for 15,000 shares of the company. On Nov. 13, 2017, the salesman emailed Carman asking for documentation of the stock sale and money transfer. Carman emailed him back the next day and said he’d provide the documentation in the future. On Jan. 19, 2018, Carman emailed him confirming his purchase of 15,000 shares out of 170,000 at $1 per share. He also attached an “Articles of Incorporation” for Controlled Environmental Farming, which stated the company had 10 million shares valued at 1 cent apiece. Carman later told the salesman that the $15,000 was a loan, not a stock purchase, since the company had been formed after the money transfer. The salesman demanded a refund, but he still hasn’t received a penny. He reported the incident to the Chisago County Sheriu's Ovce, who obtained business filing documents from the Minnesota Secretary of State for Controlled Environmental Farming. The original filing for the business’s incorporation was made Nov. 16, 2017, six days after the salesman had wired Carman $15,000 for stocks in a company he believed already existed.
Bank records indicated that on Oct. 31, 2017, Carman’s Security State Bank account had a negative balance of -$2,845.05. The day Carman received the salesman’s $15,000, he withdrew $9,887.30 from the account: $5,500 was a cash withdrawal, $4,362.30 went to a person in Rochester, Minn. named Tori Thompson, and $25 was the wire fee.
Over the next few months, the only activity on the account was a few case deposits totaling a few hundred dollars, as well as some checks written out to a Holiday gas station.
The account closed in mid-January 2017.
When police contacted Thompson, she said she had met Carman’s daughter when they were students at St. Kate’s. She was an environmental science major and performed work for Carman’s Silver Bay, Minn. aquaponics project. She lived at his house in Lutsen and he agreed to pay her $12 per hour in a verbal agreement in a lump sum at the end of the summer. She had received a check, but it bounced. She then received the wire transfer on Nov. 13, 2017.
When researching the Silver Bay proj- ect, ovcers found a Dec. 17, 2017 article in the Duluth News Tribune with the headline “High and dry: Silver Bay aquaponics venture goes belly up.” The facility was to be called Mariner Farms, Inc.; Carman had signed a $400,000 purchase agreement to take over the former University of Minnesota Duluth facility. One investor told police she and her husband had given Carman $25,000 to go toward purchasing land and facilities in Silver Bay, but he never started construction.
A group of Silver Bay investors, including the former mayor and chairman of the Silver Bay Economic Development Authority, sued Carman for breach of fiduciary duty and won. Investors collectively provided him with $175,000 for the Silver Bay venture.
According to the Duluth News Tribune article, Carman also successfully convinced In- ternational Falls, Minn. city ovcials to ouer him a 1.5-acre site for $1 for Mariner Farms’ second operation.
On Dec. 13, 2016, a judge ruled in favor of North Shore Federal Credit Union to foreclose on Carman’s Caribou Lake home. The judgment was seeking to recover more than $698,000 to cover Carman’s debt, the bank’s attorney’s fees and other costs. Carman stopped making payments on the residence in July 2016.