We are now paupers, say Lake Minnetonka scam suspects

Lake Minnetonka couple and supposed Scottish royalty Colin and Andrea Chisholm appeared in Hennepin County District Court on Thursday wearing the jail's finest orange smocks, telling the judge they couldn't afford to pay for an attorney to defend them on welfare fraud charges because they are flat broke.

Only a few years before, the two, owners of a Caribbean television network and an award-winning dog breeding business, had referred to themselves as Lady and Lord Chisholm and claimed to have more than $97 million in assets. Now, an attorney who's agreed to represent Colin Chisholm for free said the couple won't be able to afford bail.

The Chisholms had been on the lam before they were tracked down in the Bahamas on March 31. They had disappeared after abandoning the $1.6 million home they rented in Deephaven, leaving at least nine purebred Cavalier King Charles spaniel puppies and dogs with friends, and withdrawing their 7-year-old son from school midsemester.

The two are accused of making $167,420 in fraudulent medical and food-stamp claims in Florida and Minnesota from 2005 to 2012 at a time when they had more than $3 million in bank accounts and a yacht.

In arguing for increased bail, Assistant County Attorney Susan Crumb wrote that the couple's hasty arrangements for Andrea Chisholm's mother to care for her 99-year-old grandmother, who has severe dementia, proved that they had no intention of returning to Minnesota. She also said they stored 27 boxes of financial documents in a neighbor's basement without permission.

Crumb asked Judge Tanya Bransford to double the original $150,000 bail set on the welfare charges for each of the Chisholms and for the court to verify that Colin Chisholm, 62, and his 54-year-old wife were eligible for a public defender, arguing that they had lied about their finances in the past.

Bransford agreed to the higher bail and ordered the couple to turn over their passports and to sign a waiver of extradition.

Neither was employed in the Bahamas. While there, Colin Chisholm reportedly tried to solicit funds to bring Grand Prix racing to the island and to reopen a casino that had been badly damaged in a 2004 hurricane. The schemes ended when police revoked their tourist visas and put them on a late-night ferry to Florida, the court document said. Their young son was turned over to family members.

The Chisholms claim that they voluntarily agreed to turn themselves in to authorities and be extradited to Minnesota. Crumb disagreed, noting that they listed multiple home addresses in different states during the welfare fraud scheme.

Thomas Kelly, Colin Chisholm's attorney, said many of the allegations and assertions in the case are in dispute. He then listed a half-dozen facts that he said were indisputable.

The Chisholms have known they have been under investigation for a year, he said. There have been several conversations with authorities to resolve the case before charges were filed, he said.

"They are neither trying to avoid police or repaying the money," he said. "If they had money, they would settle up."

"You're not going to see that they were living a luxurious life down there," he said.

As soon as they learned about the arrest warrant, the Chisholms bought tickets for the ferry so they could surrender to authorities, Kelly said. That plan was delayed for three weeks when Colin Chisholm became ill.

Crumb told the judge a different version, recounting the haste in which the couple left Minnesota and how it didn't appear that they had any plans to return. They listed an address in the Bahamas for TCN, the Caribbean television network. But she said there was no Bahamas address. And the address listed for the company in Miami was actually a UPS store, she said.

The two were charged with welfare fraud after investigators discovered that the Chisholms were receiving welfare and medical benefits while living in a lavish lakeside home and portraying themselves as Scottish royalty who owned a broadcasting company. 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.

Andrea Chisholm's mother and Colin Chisholm's brother attended Thursday's court hearing. The Chisholms will be back in court Friday to allow their attorneys to further discuss the prosecution's increased bail request.