Criminal charges against David Eckberg should be dismissed because the Stillwater Lumberjack Days promoter never intended to defraud his creditors, the latest defense motion argues.
Attorney Eric Thole wrote in a brief filed in Washington County District Court that Eckberg had “extended credit” agreements with businesses and booster clubs he owed and that checks issued to beer distributors were “symbolic only” of his intention to pay off his debts.
“Issuing a bad check to pay a debt owed is no different from telling the creditor you cannot pay them,” Thole wrote.
The case has echoed loudly in Stillwater because allegations of fraud and 10 felony charges filed in November killed the popular festival, known for major free concerts, lumberjack demonstrations, and possibly Minnesota’s longest parade. The Stillwater City Council declared a moratorium on summer festivals after a storm of bad publicity but now is considering new proposals from other promoters.
Eckberg, who promoted Lumberjack Days since the 1990s through a company known as St. Croix Events, was charged with five counts of issuing a dishonored check and five counts of theft by check. Charges relate to checks issued to a music production company, two beer companies and the Stillwater Blue Line Boosters, represented by former NHL player Phil Housley.
Prosecutor Rick Hodsdon, in his response to Thole’s request for dismissal, said evidence shows Eckberg intended to defraud his victims.
He said the case is about “ongoing deception and duplicity of the defendant as well as the diversion of hundreds of thousands of dollars for other purposes, including his personal use, rather than payment of his financial obligations consistent with those represented by the checks that were issued to these four victims.”
Thole said that in 2010 and 2011, Eckberg transferred $216,108.38 of “his own money into the struggling business” and tried unsuccessfully to find private investors. The business failed in 2011 and Eckberg filed for personal bankruptcy.
“The defendant may have been guilty of making unwise business decisions,” Thole wrote. “Likewise, the four alleged victims may have made unwise business decisions extending credit to the defendant.”
However, that extended credit doesn’t merit criminal behavior because of a principle known as “past consideration” in which creditors offer goods and services without first receiving a check to do so, Thole wrote.
“There is nothing criminal about issuing a check that no one relied upon when the check was issued,” he wrote. “If one obtains something from another by a promise to later pay but is unable to pay, what difference does it make about the way they promised payment? Promises to pay by check cannot obtain higher legal status than promises to pay by cash.”
Hodsdon took issue with that reasoning, saying “there is utterly no precedent in case law or even under common law contract law to sustain such a view and this court should not create one.”
Eckberg relied on “false representations” to obtain goods and services for Lumberjack Days, said Hodsdon, from the Washington County attorney’s office. Eckberg, he said, “continued for several months to effectively continue to defraud his victims with promise of ultimate payment.”
Eckberg’s jury trial is set to begin on Oct. 28.