A former chief financial officer of a large Granite Falls contracting company was sentenced Tuesday to 6 ½ years in prison — the maximum allowed — for embezzling $5.77 million from her employer.
While working at Fagen Inc. as corporate controller and then CFO, Kirsten Ann Tjosaas looted the company from 2006 through 2015, spending illicit cash on several houses, at least three cars, two all-terrain vehicles, a motorcycle, a water scooter and a sailboat.
Tjosaas, a 38-year-old mother of two young children, pleaded guilty on May 6 to one count each of wire fraud and money laundering. With her sentencing by U.S. District Judge Donovan Frank, Tjosaas must also make $5.77 million in restitution.
Fagen, based in a western Minnesota town of 3,000, is a family-owned business that has built nearly half the nation’s ethanol plants. It also has constructed wind farms, chemical plants and grain elevators.
Tjosaas’ scheme started by opening an account at a Granite Falls bank in the name of Fairmont Investments, a Nebraska-based company that she controlled. She then issued at least 19 checks and also made wire transfers from Fagen to Fairmont totaling $4.5 million, according to her plea agreement.
Prosecutors said Tjosaas signed the checks using the signature stamp of another Fagen employee without the authority or knowledge of that executive. She also made false entries into Fagen’s general ledger to disguise illegitimate checks as payments to Fagen partners or the company’s vendors.
In addition to the bogus payments made to Fairmont, Tjosaas wrote about 25 fraudulent checks to another company whose bank account she controlled, according to court documents. Those checks totaled $1.2 million.
With the cash, Tjosaas bought homes in Florida, Minnesota, Kentucky and Arizona, along with timeshares in Arizona and the U.S. Virgin Islands. She also spent more than $500,000 of stolen money on travel, including $346,000 on airplane tickets, $213,000 on hotel stays and $90,000 in restaurants, according to court documents.
Judge Frank’s courtroom was packed for Tjosaas’ sentencing, with many people traveling from Granite Falls. Overflow seating had to be arranged in a second courtroom with a video feed.
Ron Fagen, Fagen Inc.’s chairman, told the court Tuesday that Tjosaas had created a “tremendous breach of trust,” and that her offense “went beyond the money and was a violation of the culture of Granite Falls and Fagen Inc.,” said Joe Dixon, a Minneapolis lawyer representing the company.
Tjosaas apologized to the Fagen family members in court Tuesday, saying the company had done “nothing but good” for her, yet she betrayed it and was ashamed of her actions, according to her attorney, Timothy Webb. She cooperated in the investigation and worked with the federal government to liquidate assets and return embezzled funds.
Prosecutors argued that sentencing guidelines for Tjosaas’ crimes ranged from 63 to 78 months, and that she should get the maximum. Judge Frank agreed.
Tjosaas’ attorneys had asked the court to depart from sentencing guidelines and give her 30 months — or 2 ½ years — in prison. They argued in court records that Tjosaas’ conduct “was no more intricate than that of a garden-variety fraud and money laundering crime,” and that she has taken full responsibility for her actions.
Her offenses were “aberrant behavior in the life of an otherwise productive, law-abiding, contributing member of society. … She graduated high school at the top of her class with a 4.0 grade-point average, and graduated college summa cum laude (from the University of St. Thomas) with a 3.82 grade-point average. She is a former high school volleyball coach and coordinator of a children’s music program for her church.”
In April, Tjosaas started seeing a therapist to “better understand her misdeeds and to ensure healthy behavior going forward,” her attorneys wrote.
The therapist concluded that Tjosaas “has an insatiable need for attention and validation” and “very low self-esteem and self-worth. … She took money to try to validate her misperceived worth to herself and to the company.”
The U.S. attorney’s office argued that her crime was “notably more intricate than a garden-variety embezzlement scheme,” court records said. “Indeed, the defendant’s claim that her offense was nothing more than ‘aberrant behavior’ in an otherwise law-abiding life ignores entirely the size, length and sophistication of her scheme.”
“Despite all her advantages she enjoyed as an honors college graduate and as the chief financial officer of a large company, defendant chose to use these advantages and abuse the trust placed in her by others to systematically steal more than $5.7 million from her employer,” prosecutors argued.
Her scheme only ended when she was fired from Fagen for “unrelated reasons” in November 2015, the U.S. attorney’s office wrote.
Tjosaas started in Fagen’s accounting department in 2004, and by 2007 she was controller, the No. 2 finance job at Fagen.
The top job, CFO, was held by Tjosaas’ mother, Jennifer Johnson. After 19 years as a top Fagen executive, Johnson retired in December 2013. Tjosaas succeeded her as CFO.
According to court documents filed by her attorneys, Tjosaas’ “only criminal history” before the embezzlement consisted of two speeding tickets and a harassment restraining order violation, which resulted in a stay of adjudication.
In early 2009, the parents of a 17-year-old girl on a high school volleyball team coached by Tjosaas alleged that she developed an “unhealthy and improper” relationship with their daughter, taking her on unauthorized trips to the Twin Cities and giving her a “secret phone” so they could stay in touch, according to court records.
A state court judge issued a restraining order against Tjosaas for harassment.