Wealthy Minn. couple wanted for welfare fraud arrested in Florida

A wealthy west-metro couple who fled welfare fraud charges in Minnesota were arrested Monday in Florida after being tracked down in the Bahamas.

Andrea Lynne Chisholm, 54, and Colin A.J. Chisholm III, 62, portrayed themselves to neighbors and business associates as Scottish royalty and to aid workers as paupers, authorities say.

They were charged in March with making $167,420 in fraudulent medical and food-stamp claims in Florida and Minnesota from 2005 to 2012, a time when they had several million dollars in bank accounts, owned a $1.2 million yacht and ran a Cavalier King Charles Spaniel pedigree breeding business that produced an award-winning dog at the Westminster dog show.

The two had been the subject of an exhaustive search that ranged from the $1.6 million home they rented on Lake Minnetonka to far-flung warmer destinations that authorities suspected they had fled to. Last week, Minnesota authorities shared their investigative findings with the Miami FBI office and other federal agencies, and Florida ports were alerted to be on the watch for the Chisholms.

On Monday, the two were visited by police in Freeport, on Grand Bahama Island, and told that their visas had expired. Officers escorted the couple, their young son and their dog onto a ship bound for Port Everglades, Fla., where they were arrested.

The Chisholms' son and dog were turned over to family members.

They are being held without bond in the Broward County jail in Florida and will appear in extradition court Wednesday, where they will reveal whether they'll voluntarily return to Minnesota to face charges or fight extradition.

Hennepin County Attorney Mike Freeman declined to comment Tuesday about the case, in contrast to the outrage he expressed during a March news conference announcing the charges against them in which he called them "rich folks ripping off the system" and referred to them as "Lord" and "Lady."

A trail of deceit

Medica insurance fraud investigators suspected things were amiss when they discovered that the couple lived in a luxury lakeside home in Deephaven and that Colin Chisholm portrayed himself as a Scottish aristocrat who was a wealthy executive in the broadcasting industry.

Medica found that part of the $60,000 in medical claims the company had paid out went for massages at The Marsh wellness center and spa in Minnetonka, court documents said. The Chisholms received benefits from Minnesota even when they lived in Florida for two years, where they also obtained welfare checks.

Just weeks after applying for their first welfare payment, Colin Chisholm bought his yacht from a man in Fort Lauderdale, Fla., according to charging documents. He told the seller that he controlled about $30 million in network television advertising on CNBC.

Around that time, the Chisholms were telling benefit workers that they had moved in with Andrea's mother in south Minneapolis.

Two days before their son was born in 2007, the Chisholms told Florida public-assistance workers that they were indigent and received cash, food support and medical assistance, the documents said. Minnesota ended up paying more than $22,000 in medical bills for Andrea's pregnancy.

While the Chisholms consistently reported no income or employment when they reapplied for welfare, they continued to operate businesses or start up new ones. When trying to woo investors to a satellite-delivered digital television network based in Miami, Colin Chisholm claimed to have assets totaling more than $97 million, documents say.

By 2009, the Chisholms were living in Deephaven with Andrea Chisholm's elderly grandmother, for whom she had power of attorney. The couple were funneling thousands of dollars from businesses that they hid from authorities through the grandmother's account, documents say.

They paid their monthly $2,750 rent in cash.

In March 2012, their benefits were finally cut off when they couldn't explain how they were able to pay rent and personal expenses with no income.

David Chanen • 612-673-4465