A former Gustavus Adolphus College business professor pleaded guilty Thursday to embezzling more than $670,000 from a Wyoming-based real estate company.
James Anthony Kroger, 46, of Cottonwood, was convicted in a St. Paul federal courtroom on one count of wire fraud that accused him of embezzling money invested into a company that he helped partner, which purchased properties in Texas sold at auctions. Kroger, a tax and accounting professor, was employed at the college beginning January 2024.
“This defendant was a professor and an attorney — someone entrusted to teach and uphold the law. Instead, Kroger betrayed that trust, embezzled more than $670,000, and blew it on a lifestyle of self-indulgence,” said acting U.S. Attorney Joe Thompson. “In Minnesota, titles and credentials won’t shield you from federal prosecution. If you choose greed over integrity, you will face justice.”
According to the indictment, Kroger and a business partner set up a joint real estate venture in October 2019 called Lone Star Municipal Finance Co. LLC. Kroger managed the day-to-day operations of the venture, which was created to invest in Texas properties sold at public auctions due to unpaid taxes.
Kroger opted for the venture to acquire the tax deeds to the properties and profit by selling the property back to the delinquent taxpayer, renting them to tenants or improving and reselling them.
In November and December 2019, his partner, who provided all investment capital, poured in $840,000 to buy the tax deed properties. The charges allege Kroger then embezzled and laundered more than $670,000 of that money from February 2019 to May 2021. He then transferred more than $480,000 from the Lone Star bank account to his personal accounts from November 2019 to February 2020 using a memo line of “loan” or “expense reimbursement.” Another $200,000 transferred to the Lone Star account by his partner was instead steered to Kroger’s personal account.
Kroger instead used the funds on luxurious items and laundered the money by purchasing vehicles and gold and silver bullion. He filed a phony bankruptcy petition to conceal the scheme, the indictment said.
“These purchases included large cash withdrawals, purchases of gold and silver bullion, checks to family members, paying off loans against insurance policies, and retail and travel purchases from Amazon, eBay, Apple, Delta, and other vendors,” according to the indictment.
