Lake Minnetonka millionaire Colin Chisholm, already in prison on welfare fraud charges, was indicted in federal court Friday, accused of stealing more than $2 million from investors in a phony television network start-up.
Chisholm, 64, was indicted on seven counts of wire fraud and six counts of mail fraud. He made his initial appearance before Magistrate Judge Becky Thorson in U.S. District Court in St. Paul.
“Chisholm claimed to have devised a creative and exciting investment opportunity,” said Assistant U.S. Attorney Lola Velazquez-Aguilu. “However, it was built on a series of lies.”
Chisholm courted investors who thought they were financing a promising new business enterprise, all the while telling them lies, said state Commerce Commissioner Mike Rothman. In reality, Rothman said, Chisholm was using their money for personal enrichment and luxurious living.
According to the indictment and other court documents, since 2004 Chisholm solicited funds from investors using The Caribbean Television Network Inc., (TCN) an entity purportedly formed to broadcast satellite television throughout the Caribbean. As part of the solicitation, he told potential investors that TCN would serve as a network for a group of cable television channels, allowing advertisers to buy advertising time on multiple channels via a single advertising buy.
Throughout the scheme, Chisholm told investors that TCN was on the verge of securing between $20 million and $100 million in funding to begin broadcasting, and that their investment would be used as interim financing for the network.
According to the indictment and court documents:
Chisholm also lied to some investors by telling them they were buying shares of TCN stock owned by his alleged family trust — the Comar Trust — and told some investors that their investments were guaranteed by the Comar Trust. In fact, the Comar Trust did not have funds to guarantee the investments, court documents say.
He also lied to investors about his personal background, telling some investors that he was the grandson of Hugh J. Chisholm Jr., and the son of William Chisholm, of the Oxford Paper Company — giving the false impression that he came from considerable family wealth.
He claimed to be a Scottish chieftain of the Clan Chisholm and claimed to have close personal ties to members of the family of former President George H.W. Bush.
In addition, court documents say, Chisholm failed to disclose his own misuse of investor funds, including funds he used to satisfy a $255,500.50 settlement with Verizon and for personal expenses, such as the purchase of a yacht, personal fitness and wellness expenses and rent for his home on Lake Minnetonka.
In January, he was sentenced to nearly two years in prison for falsely receiving more than $160,000 in welfare benefits.
He and his wife were living in a $1.6 million mansion in Deephaven on Lake Minnetonka and owned a million-dollar yacht during part of the time they were illegally receiving welfare and other benefits in Minnesota and Florida from 2005 to 2012.
The two were arrested in March after fleeing Minnesota for the Bahamas. The couple, who once referred to themselves as Scottish nobility, “Lord and Lady Chisholm,” claimed to have $97 million in assets.
In March 2012, the Chisholms’ benefits were cut off when they couldn’t explain how they were able to pay their rent and personal expenses with no income. The couple had more than $3 million in bank accounts while they were receiving welfare payments, authorities said.