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KARE 11 Investigates: Salesman behind police car double billing scheme to plead guilty

A KARE 11 investigation exposed how law enforcement agencies across Minnesota were overcharged $803,000 on squad car purchases.

The man at the center of a double billing scheme that overcharged more than 200 police agencies statewide has decided not to fight criminal charges.

Gerry Worner was the long time fleet manager for Nelson Auto Center, a car dealership located in Fergus Falls, Minnesota.

A KARE 11 investigation exposed widespread overcharges on specially-equipped police vehicles sold under Nelson Auto’s master contract with the state.

In the wake of KARE’s reporting, the BCA launched a criminal investigation.

In July, 2017 Otter Tail County prosecutors filed a five-count complaint accusing Worner of felony Theft by Swindle.

Worner originally denied any wrongdoing.

This week, however, he signed an agreement with prosecutors to plead guilty to one of the theft counts.

Worner Plea Agreement (003) (Text)

If a judge approves the plea bargain, he will serve 30 days in the Otter Tail County jail, be on probation for five years, pay a fine, and make restitution to the victims.

According to an audit by the Minnesota Department of Administration, taxpayers were overcharged a total of $803,309 on 3,225 vehicles on sales dating back to 2010.

AUDIT: https://www.documentcloud.org/documents/4378423-State-Audit-Nelson-Auto-Center.html

More than 200 law enforcement and government agencies in Minnesota fell victim to the swindle, according to investigators.

“Obviously the biggest surprise was that someone had the audacity to try overcharging law enforcement,” Minnesota Department of Administration Assistant Commissioner Curt Yoakum said.

KARE 11’s investigation documented how Nelson Auto overcharged agencies on features like spotlights and heated mirrors that were supposed to be included in the base price according to the state contract.

Nelson Auto’s owners are not facing charges. They say they were not aware of the overcharges and have cooperated with the investigation. State officials say the dealership is in the process of making refunds to the government agencies that were overcharged.

However, Minnesota Department of Administration Commissioner Matt Massman said his agency stripped Nelson Auto of its $15 million-a-year contract to sell Ford SUV’s to law enforcement agencies.

“I’m angry!” Massman told KARE 11 last year. “This is a very frustrating experience to have had a state contract taken advantage of like this.”

KARE 11’s investigation also revealed major holes in the oversight of purchases made through state contracts.

Records showed the Department of Administration and the Department of Public Safety failed to investigate early warnings from a whistleblower and even reports of overcharges from several police agencies.

In response, Commissioner Massman has instituted new fraud prevention policies and hired a compliance expert to review other state contracts for abuses.

“We want to make sure we’re putting the resources on it to get this right – and frankly to deter any potential vendor from doing something similar on another state contract,” Massman said.

Minnesota’s Office of the Legislative Auditor is still conducting a probe of the double billing on state contracts and additional steps government agencies need to adopt to prevent a similar occurrence in the future.

Worner’s plea deal is what is known as an Alford Plea. It means he’s not admitting guilt but concedes there is enough evidence for him to be found guilty if the case proceeded to trial.

The deal, while signed, is not official until the court hearing scheduled for May 10th.

Our investigation started after a tip from a viewer.

If you have a suggestion, or want to blow the whistle on fraud or government waste, email us at:

investigations@kare11.com

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