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Published May 08, 2013, 03:06 PM

Red Lake Falls’ ex-administrator accused of theft

Allen Ducharme, former city administrator in Red Lake Falls, Minn., faces two felony theft charges alleging he took $2,394 in city money by using a city debit card to buy items for a post-prom party he and his wife held for local high school students.

By: Stephen J. Lee, Grand Forks Herald

Allen Ducharme, former city administrator in Red Lake Falls, Minn., faces two felony theft charges alleging he took $2,394 in city money by using a city debit card to buy items for a post-prom party he and his wife held for local high school students.

Each felony charge carries a maximum sentence of five years in prison if he were to be convicted. He’s also charged with two related misdemeanor counts of misconduct by a public officer or employee.

Ducharme, 49, who was mayor of the city of 1,400 in the 1990s until 2005 when he was named administrator, resigned in August when questions were raised about discrepancies in the city’s finances.

He told the Herald Wednesday he plans to contest the charges in court, which he called retaliation by city officials related to his battle in recent years with disabling health issues.

In September, Red Lake Falls County Sheriff Mitch Bernstein began investigating a complaint by the League of Minnesota Cities of possible theft and fiscal mismanagement in Red Lake Falls. It stemmed from concerns voiced last July by Chief Deputy Brad Johnson.

On April 29, Bernstein filed a criminal complaint in state district court in Red Lake Falls with the four counts against Ducharme, who is slated to appear in court on the charges June 10.

According to the probable cause statement, City Council members contacted Johnson in July with concerns about a city debit card being used inappropriately by Ducharme without city approval. Ducharme, and his wife, Cindy, who is secretary for the Red Lake Falls school district, for years had organized post-prom parties for students at Lafayette High School in Red Lake Falls.

Johnson alleges Ducharme charged $2,394 worth of goods on the city debit card for items connected to the parties, including four large novelty trikes bought, and several party games leased, from a games store in Fargo in May 2010.

Johnson says Ducharme also charged gas on the city’s card for his trip to Fargo to get the party supplies.

When their youngest child graduated in 2011, the Ducharmes quit organizing the post-prom parties.

Ducharme and his wife moved to Crookston last year.

“I believe I am being retaliated against by City Council members,” he said Wednesday.

Ducharme said he has several serious health issues, including heart problems, diabetes and seizures, and uses a walker now, and has memory problems. He was taken by ambulance last week to Abbot Northwestern Hospital in Minneapolis for treatment and tests haven’t been completed, he said.

He and his wife owned and managed Cindy’s Sunrise restaurant until the 1990s, which is where they would hold the post-prom parties for the local high school students, he said.

Ducharme said he believes some of his health issues may have affected his work for the city in the last year or so and may be part of the problem with the city’s books.

But he said that litigation he pursued against the city in recent years concerning his disabilities also is related to what he suspects is retaliation against him by city officials resulting in the charges filed last week.

“I am not running from these charges and I’m not saying I’m guilty,” he said. “We will go to court.”

According to a news release from Sheriff Bernstein, Ducharme may face more charges by the time he appears in court in June.

It was reported last summer that the city’s savings and checking accounts could not be reconciled by auditors and officials were looking into the apparent discrepancies.

At the same time Ducharme resigned in August, Mayor Vaughn Thorfinnson also resigned, saying he disagreed with the way the City Council was treating Ducharme.

Thorfinnson, who had served a total of 24 years as mayor during different stints, and is in his 80s, ran for mayor again in November, but lost to Council member Kevin Harmoning.

Mayor Harmoning, who is president of operations for Homark Homes, a modular house manufacturing plant, refused to comment Wednesday about the city’s finances and hung up on a Herald reporter.

Kathy Schmitz, formerly an accountant in Crookston, was hired as the city’s administrator at the end of November. She declined to comment Wednesday about city leaders’ actions before she became administrator.

But she said the city does have a shortfall of financial reserves and is looking for ways to increase revenues. The city’s books are being audited by an independent, private accounting firm from Thief River Falls and their report should be completed in about a month, she said.

Red Lake Falls has had mayor trouble before.

Harmoning, in fact, was appointed mayor in 2007 after Mayor Robert Philion resigned as part of a plea deal with prosecutors over a theft charge.

Philion had been charged with felony theft for taking things out of his house which he had sold to the city in 2006 as part of a buyout of homes on the unstable bank of the Red Lake River. Philion pleaded guilty to a lesser charge of criminal damage to property, paid $10,122 in restitution to the city and did 50 hours of community service in return for having a sentence of one year in jail stayed, or not imposed.