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Staff writer

The Hennepin County Attorney’s Office Nov. 5 charged a 44-year-old Andover man with 36 counts of fraud for an alleged paper broker Ponzi scheme.

Gerard Frank Cellette Jr., who allegedly owes investors approximately $53 million, was already being sued in civil court when the criminal complaint was filed.

According to the complaint, Cellette began Minnesota Print Services in 2002. By 2004, he was in need of additional capital to continue his business, so he began talking to investors.

The initial group of 10 investors were relatives and acquaintances from Minnesota. More investors eventually started coming in from California, Georgia and Illinois.

The scheme, as alleged in the civil court case, was that Cellette told his investors he paid cash to paper mills when buying product to get a 20 percent discount. He would then work with his other supposed printing company clients to subcontract work.

The investors were told they would receive a 10 to 12 percent return on their investment within 60 days to 90 days.

Cellette allegedly paid back some of the investors with new investment money that came in, then he would tell them about fictitious paper broker contracts to entice payment.

Civil lawsuits filed Sept.  by three California businesses and one from Georgia  brought this scheme to the attention of the Hennepin County Attorney’s Office.

These businesses hired a financial investigator, who learned from Cellette that the loans funded his personal lifestyle and the bank statements he provided to the businesses in August were false and had been altered by him, according to the civil lawsuit.

Since September 2006, Cellette had been working with a California resident named Steve Quarles, who is the brother of a friend of a previous Minnesota investor.

According to the criminal complaint, Cellette would deliver a list of fictitious printing contracts to Quarles, who would work with prospective investors to determine who was interested.

The complaint alleges that the deal sheet that investors received had the name of the fictitious customer, the amount of paper to be purchased, the total contract price and the time period when the principal investments plus interest would be returned.

Cellette mostly conducted business out of his Andover home. He met with Quarles and other investors two to four times a year in downtown Minneapolis, often at the Graves Hotel.

According to the criminal complaint, Cellette said that he never told Quarles that fictitious contracts were the primary foundation of Minnesota Print Service’s investments.

Eric Hagen is at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it