Former Ramsey City Councilmember David Elvig was sentenced June 17 in Anoka County District Court to 60 days in jail with credit for two days served and ordered to pay almost $25,000 in restitution for swindling from the employees of his personal business.
A jury convicted Elvig on two felony charges of theft by swindle April 19.
The court stayed a 13-month prison term and placed Elvig on probation for five years. If he successfully completes probation, one of the felony counts would be reduced to a misdemeanor on his record, according to Prosecutor Susan Crumb, an assistant Hennepin County Attorney. The Hennepin County Attorney’s Office prosecuted this case to avoid any potential conflict of interest.
Once released from jail, he will be ordered to do 15 days of community service under the sentence to service program. He must also pay $24,520.77 in restitution.
When asked what he thought about the amount of time of Elvig’s jail sentence, defense attorney Richard Malacko said, “We respect that decision…I believe it sends a clear message and he certainly is not going to re-offend.”
According to Crumb, the Hennepin County probation officer recommended this jail time and the Hennepin County Attorney’s Office agreed with it.
Malacko said Elvig intends to pay the restitution as soon as possible.
Crumb said he must pay the money back before the end of the five-year probation.
As owner of E-Street Makers, he had been accused of embezzling $19,596.83 from his employees’ 401(k) profit sharing, ground health and dental plans from April 23, 2009 to Jan. 14, 2010. The company went out of business in December 2009 and its assets were foreclosed on in March 2011.
Malacko said the restitution Elvig must pay is higher because employees suffered additional losses such as tax consequences.
According to a September 2011 criminal complaint, the U.S. Department of Labor Employee Benefits and Security found that Elvig kept the 401(k) employee contributions in E-Street’s general operating account and used it to pay business expenses such as payroll, instead of applying it to the three employee plans for up to 15 employees.
Elvig’s case was originally handled by the Isanti County Attorney’s Office instead of the Anoka County Attorney’s Office to avoid any conflict of interest with Elvig being a Ramsey councilmember. Isanti County in late August 2012 added 24 additional felony and 30 gross misdemeanor and misdemeanor charges of theft by swindle, theft by take/use or transfer of movable property as well as theft by indifference to owner rights, representing each E-Street Makers employee.
The Hennepin County Attorney’s Office took over the case in January and dropped 52 counts, leaving two felony theft by swindle charges.
After the jury found him guilty, Elvig resigned from the council. Ramsey city charter prevents a citizen to continue serving on the council if they are convicted of a felony charge.
Elvig’s term as a Ward 1 representative was not set to expire until the end of 2014. Ramsey voters will decide between Tom Heifort and Jill Johns in a special election to fill the remaining term. Absentee voting begins June 28. The special election will be held July 30, 7 a.m.-8 p.m.
Eric Hagen is at email@example.com