BROOTEN, MINN. – An alleged swindle of gambling proceeds that were the main source of charitable donations for Brooten has divided and devastated the small town.

Jana Zenner, 38, a well-known local business owner, has been charged in Stearns County District Court with felony theft by swindle. More than $135,000 in pulltab revenue disappeared during her time as president of the Brooten Commercial Club, which held the state license for charitable gambling in the city of 750 residents about 115 miles northwest of the Twin Cities.

Zenner was convicted last month of a separate felony swindling charge in neighboring Pope County for stealing nearly $49,000 from an elderly family friend.

Residents are having a hard time grasping the allegation that a favorite local daughter and community leader was at the center of such swindles.

“It’s just mind-boggling. It really is,” said Randy Olson, owner of the local newspaper, the Bonanza Valley Voice. “Obviously, everyone has a bad taste in their mouth.”

“There’s been so much damage done,” said Tony Rooney, owner of Rooney’s Bar in the village of Sedan, about 8 miles outside Brooten. “It tore our community apart. Many people are angry with her, and probably for good reason.”

According to the court complaint, Zenner stole the pulltab money from 2016 to 2018 and “admitted she had taken the money to keep her multiple businesses in town afloat.” She also admitted burning pulltab games to destroy evidence.

Zenner owns several businesses in town, including a liquor store, market and gift shop. A Brooten native and local high school graduate, she’s served in several leadership roles in the community.

Zenner’s lawyer, Minneapolis defense attorney Paul Engh, said she hopes to set everything right.

“Ms. Zenner is working to resolve this unfortunate circumstance,” Engh said, “and to make good on any losses that were incurred.”

Zenner, Olson said, is “warm and energetic. Makes things happen. You need people like that in a small town. You need people who generate activity and excitement.”

But the excitement Zenner has been generating of late isn’t the kind most people welcome.

Zenner’s swindling conviction last month involved 91-year-old Gordon Hollen, a family friend she offered to help with finances after his wife died. He lived on Scandinavian Lake about 15 miles outside Brooten, where Zenner also resides.

According to court documents, Zenner wrote large checks on Hollen’s account to herself, her husband and their businesses. She was sentenced to five years of probation and ordered to do community service and make restitution.

The charge she now faces has been much more damaging to her hometown, residents say.

As head of the Commercial Club, Zenner presided over a downward financial spiral that left the club broke and owing more than $50,000 in state and federal taxes, with no prospect of coming up with the money.

As recently as 2015, the club donated more than $80,000 to community groups, said Olson, who became vice president of the Commercial Club after Zenner resigned in 2018.

Now, he said, “We had to say no to a lot of groups that came asking for donations. The club has no money, no organization, no ability to generate money.”

Some Brooten residents are so angry that they’re buying their liquor in Belgrade, 8 miles away, rather than shopping at Rooster’s Bottle Shop owned by Zenner, said Tom Kampsen, owner of the Ka-De-Shack Bar in Brooten.

Kampsen is among Zenner’s alleged victims. Bars that sell pulltabs get to keep a portion of the proceeds, typically 20% for regular pulltabs and 15% for e-tabs. Kampsen said his take in recent years had been in the neighborhood of $7,500 to $10,000 a year. But in 2019, he said, he received just $204 for the entire year.

“We trusted her,” he said. “She lied to us.”

Marcia Hallermann, owner of Marcia’s Bar & Grill in Brooten, said she began to suspect something was wrong as early as 2015. In subsequent years, she said, her payout — previously around $10,000 a year — dwindled until in 2018, it was only $897 for the year.

“I have been in business for 30 years,” Hallermann said. “I have worked with many different gambling organizations and I have never seen anything so sad and pathetically operated in my lifetime.”

Zenner and Michelle Halls, the Commercial Club’s former gambling manager, said the money shortages were caused by a general decline in gambling, according to Hallermann.

“We were going on information that Jana and Michelle gave us,” Hallermann said. “They were saying, ‘Oh, pulltab is down, gambling is down.’ ”

Hallermann raised questions about the club’s finances but said it was difficult to go up against Zenner and Halls, who were viewed as pillars of the community.

“They were influential people,” she said. “And how can Marcia Hallermann say something, because I’m just this [person] running a little bar?”

Halls did not respond to a request for an interview. A former compliance officer at the Bonanza Valley State Bank in Brooten, she is no longer employed there, according to a bank spokesperson.

“Right now, when we’re in this pandemic, it would be great if we had a club with a good amount of money to share out,” Hallermann said. “We don’t have a civic group that can donate any money in our community.”

The Brooten gambling license is now held by the relief association of the Brooten Fire Department. Chief Matt Ogdahl said the department plans to donate to community activities, but it won’t be at the same level as the Commercial Club. The department has only two pulltab locations, while the club had five. And the department also will use pulltab money for its own equipment needs.

Hallermann questioned why state auditors didn’t catch the alleged swindle sooner. The Minnesota Gambling Control Board, which regulates charitable gambling, declined to comment.

Even after a conviction on one swindle and a felony charge on another, many in the community still support Zenner, Olson said.

“A lot of people to this day don’t believe any of this, people who grew up with her,” he said. “They want to believe that it was just a misunderstanding.

“It’s a lot of money and people can’t even wrap their head around it.”

It’s a mess, Olson said, adding that he believes charitable gambling is ripe for fraud.

“The gambling business is based on cash,” he said, “and it’s based on trust.”