GOLDEN VALLEY, Minn. - North Dakota officials have initiated a review of all police vehicles purchased using the state’s contract with Nelson Auto Center, a car dealership located in Fergus Falls, Minnesota.
This comes in the wake of a KARE 11 investigation that exposed a taxpayer rip-off in Minnesota totaling roughly three-quarters of a million dollars, and revealed major holes in the oversight of purchases made through state contracts.
Following KARE’s original report in April 2017, Minnesota launched a criminal investigation which resulted in a five-count swindling indictment against Nelson Auto’s former fleet manager, Gerry Worner. He has denied the charges.
Court documents indicate investigators have identified 205 police and government agencies across Minnesota that either did not get all the features they paid for or were double-billed for equipment such as spotlights and heated mirrors on their squad cars.
North Dakota officials tell KARE 11 they have completed a review of purchases state agencies made from Nelson Auto Center and found no instances of fraud.
However, the North Dakota Office of Management and Budget and the North Dakota Department of Transportation State Fleet have sent a letter to law enforcement and local government agencies across the state strongly recommending they review all police vehicle purchases from Nelson Auto Center for the years 2013-2017.
The state also created a dedicated web page to assist with the review.
While the trial for Nelson Auto’s former manager is still pending in Minnesota, the dealership owners are not facing charges. They say they were not aware of the overcharges.
However, Minnesota Department of Administration Commissioner Matt Massman said his agency stripped Nelson Auto of their $15 million-a-year contract to sell Ford SUV’s to law enforcement agencies.
“I’m angry!” Massman told KARE 11. “This is a very frustrating experience to have had a state contract taken advantage of like this.”
KARE 11’s investigation discovered the Department of Administration missed multiple early warnings by 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.
The Department of Administration is also nearing completion of an internal audit which examined 3,000 purchases dating back to 2011 to identify the full scope of the refund taxpayers are owed.
“We hope to have a final number as to what needs to be returned to taxpayers from an overcharge situation and to what jurisdictions that money needs to be repaid,” Massman told KARE 11.
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