carter siverson complaint

StateofMinnesota DistrictCourtCountyofHennepin 4thJudicialDistrict

13A24952ProsecutorFileNo.27CR1415566CourtFileNo.

StateofMinnesota, COMPLAINT

Plaintiff, Summons

vs.

CARTERDEANSIVERSONDOB:12/08/1963

6123RDAVENWFaribault,MN55021

Defendant.

The Complainant submits this complaint to the Court and states that there is probable cause to believeDefendantcommittedthefollowingoffense(s):

COUNTI

Charge:NonpaymentforImprovementMinnesotaStatute:514.02.1(b),withreferenceto:609.05.1MaximumSentence:10yearsand/or$20,000OffenseLevel:Felony

OffenseDate(onorabout):09/01/2011

Control#(ICR#):12004090

Charge Description: That on or about June 23, 2009, through November 30, 2012, in Excelsior, HennepinCounty, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising, hiring,counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES, Inc., didunlawfully fail to use the proceeds of a payment made to him for the improvement of real estate atWayzata, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTII




Charge Description: That on or about May 8, 2011, through November 30, 2012, in Excelsior, HennepinCounty, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising, hiring,counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES, Inc., didunlawfully fail to use the proceeds of a payment made to him for the improvement of real estate at

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Minnetonka, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTIII




Charge Description: That on or about August 12, 2011, through November 30, 2012, in Excelsior,Hennepin County, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising,hiring, counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES, Inc.,did unlawfully fail to use the proceeds of a payment made to him for the improvement of real estate atEden Prairie, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTIV




Charge Description: That on or about August 12, 2011, through November 30, 2012, in Excelsior,Hennepin County, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising,hiring, counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES, Inc.,did unlawfully fail to use the proceeds of a payment made to him for the improvement of real estate atMinnetonka, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTV



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Charge Description: That on or about February 27, 2012, through November 30, 2012, in Excelsior,Hennepin County, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising,hiring, counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES,Inc., did unlawfully fail to use the proceeds of a payment made to him for the improvement of real estateat Minnetonka, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTVI




Charge Description: That on or about January 1, 2012, through November 30, 2012, in Excelsior,Hennepin County, Minnesota, CARTER DEAN SIVERSON, acting alone or intentionally aiding, advising,hiring, counseling or conspiring with KEITH RAHN WATERS and KEITH WATERS & ASSOCIATES,Inc., did unlawfully fail to use the proceeds of a payment made to him for the improvement of real estateat Victoria, Minnesota for the payment of labor, skill, material, and machinery contributed to theimprovement, knowing that the cost of the labor performed, or skill, material, or machinery furnishedremains unpaid, and CARTER DEAN SIVERSON has not furnished either a valid lien waiver undersection 514.07 or a payment bond in the basic amount of the contract price for the improvement, and thepaymentproceeds.

COUNTVII

Charge:TheftbySwindleMinnesotaStatute:609.52.2(4)MaximumSentence:20yearsand/or$100,000OffenseLevel:Felony



Charge Description: That on or about September 1, 2011, through February 8, 2012, in Excelsior,Hennepin County, Minnesota, CARTER DEAN SIVERSON obtained property or services from W.D. andC.M by swindling them using artifice, trick, device or other means, and the property or services had avalueinexcessofThirtyFiveThousandDollars($35,000.00).

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STATEMENTOFPROBABLECAUSE

Your Complainant, Mark Stock, is a Detective with the Minnetonka Police Department. Along with Lieutenant Michael Murphy of the Wayzata Police Department, he has investigated allegations that KEITH RAHN WATERS (DOB: 02/19/43) and CARTER DEAN SIVERSON (DOB: 12/08/63), Defendants herein, defrauded numerous homeowners and a faith-based organization that hired Keith Waters & Associates, Inc., to remodel or build homes and a worship center. The investigation included interviews with victims, subcontractors, the Defendants, and former employees of the Defendants' firm. Additionally, your Complainant has reviewed financial and business records obtained from Defendants' firm during the execution of a search warrant. For the reasons described herein, probable cause exists to believe that WATERS and SIVERSON violated MN. Statute ? 514.02 by failing to use payments furnished by the victims to pay for labor and materials supplied by subcontractors; and that SIVERSON committed theft by swindle, in violation of MN Statute ? 609.52, by submitting forged lien waivers to obtain construction loan funds and the personal funds of individuals. Background During the time period relevant to this complaint, Keith Waters & Associates, Inc. ("KWA") was a design/build firm that contracted with clients to build or remodel residential homes. KWA held a residential building contractor license with the State of Minnesota. WATERS was the qualifying person for the license and was principal owner of KWA. SIVERSON, co-defendant herein, was a minority owner. As co-owners of KWA, Defendants held separate duties. WATERS was primarily responsible for designing homes and sales. SIVERSON duties included preparing bids, managing individual projects, and making money draw requests from clients, banks, or escrow agents to pay for project expenses. WATERS had co-founded Waters and Bonner in the 1970's, after starting his own architectural firm and focusing his practice on residential architecture. In 1992 WATERS and Bonner hired SIVERSON. SIVERSON eventually became a minority owner following Bonner's departure from the firm. KWA's offices were first located in Eden Prairie, Minnesota, but eventually moved to 261 School Avenue in Excelsior, Hennepin County, Minnesota, where the firm operated until it closed in late 2012. Summary of Defendants' Contractor Theft Crimes Under Minnesota law, a person contributing to the improvement of real estate shall hold in trust proceeds of payments received for the benefit of those persons who furnished labor, skill, material or machinery contributing to the improvement. Accordingly, KWA was required to hold construction loan funds received from escrow agents or clients to pay all subcontractors providing labor, materials, or skills. Absent providing a homeowner a valid lien waiver, or holding a payment bond, a contractor who fails to use such funds for these purposes, knowing that labor, skill, machinery, or material remains unpaid, has committed contractor theft. Among other reasons, the purpose of this law is to protect a homeowner from the possibility of having a mechanics lien placed on her property; should this occur, the homeowner will be placed in the financially untenable position of having to pay again for labor and materials in order to remove the lien. Over the period of time August 2010 through the fall of 2012, KWA failed to use over $1.2 million it received from five homeowners and The Blessing House Ministries, to pay subcontractors who had provided labor and materials on construction projects. Two of the homeowner victims hired KWA to build new homes, while the other three employed KWA to complete remodeling projects. The Blessing House Ministries contracted with KWA to build its worship center in Victoria, Minnesota.

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The commission of contractor theft was similar in each of the projects. KWA obtained funds, either through the submission of draw requests to Custom Home Builders Title ("CHBT"), a Plymouth, Minnesota company that provided construction loan disbursement services, or in the case of several of the victims, directly from the homeowners. These draw requests required representations from KWA that subcontractors and suppliers had been paid for labor and/or materials. Without these representations, as made in lien waivers presented to CHBT or individuals, payments would not have been made to KWA. Most troublingly, WATERS and SIVERSON entered into building contracts with all six victims, and continued to receive their funds, without informing them that KWA was in serious financial trouble and had been for a number of years. In fact, the firm had operating losses in 2004, 2005, 2006, 2008, and 2009. By 2009, KWA's $300,000 line of credit was at its limit, WATERS had taken out several loans on speculative real estate projects, and was making a $741 per month BMW car payment. And critically, as of October 2009, KWA owed over $1.3 million to subcontractors for labor and materials on past projects. These financial circumstances existed well before KWA signed contracts with the victims cited in this complaint. According to WATER's former partner, William Bonner, KWA in effect began "robbing Peter to pay Paul." The five homeowner victims and The Blessing House Ministries shared common experiences with KWA that ultimately led the victims to incur substantial financial losses. Victims reported to your Complainant and to Lt. Michael Murphy that monies furnished to KWA to be used to pay subcontractors were not used in that manner. In all instances KWA either only partially paid or did not pay at all the subcontractors who had provided materials and/or labor. Ultimately, each of the victims was forced to pay subcontractors again in order to remove liens on their properties. The victims told similar stories to your Complainant. Soon after the start of construction, work slowed down and sub-contractors either walked off the job site or only occasionally showed up. After confronting KWA about the work slow-downs and receiving several excuses, the victims made direct contact with subcontractors and learned that KWA had not paid them. As further described herein, SIVERSON was responsible for preparing lien waivers for presentation to CHBT and homeowners. In a number of instances, SIVERSON forged lien waivers, falsely representing that subcontractors had been paid. CHBT and homeowner victims relied on these false representations in order to disburse loan funds or in making payments to KWA. This conduct provides a separate set of theft by swindle crimes committed by SIVERSON. On November 30, 2012, the Minnesota Department of Labor and Industry fined KWA $80,000, and $20,000, jointly and severally, WATERS and SIVERSON, and revoked KWA's residential construction license. In each of the six projects summarized below, WATERS and SIVERSON, through KWA, failed to use monies furnished by victims to pay for materials and labor on their building projects. Additionally, in the home remodeling project of W.D. and C.M. detailed below, SIVERSON submitted forged lien waivers in order for KWA to receive disbursements. Major Home Renovation in Wayzata ? Victims M.A. and L.A. On June 23, 2009, M.A. and L.A. signed a multi-million dollar, multi-phased contract with KWA for the major renovation of a home in Wayzata, Minnesota. M.A. and L.A. financed the project out of their own funds. As construction proceeded, the victims observed work slow-downs and eventually learned that KWA had not paid various subcontractors despite the fact that the victims had been paying KWA during the course of the construction and representations from KWA that payments were being made. By October 2012, over $650,000 in funds furnished to KWA by the victims had not been paid to subcontractors. These subcontractors included Allstar Concrete & Stone, V &R Designs & Fabrication

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LLC, Cityscape Contractor, Inc., Vetter Stone Company, Riverside Mechanical, Berg Exteriors, Angelo Architectural Associates, and G.F. Hayes & Sons Electric, Inc., and many others. As a result of KWA's failure to use the monies of M.A. and L.A. to pay subcontractors, the victims ended up paying a number of subcontractors more than once, thereby suffering serious financial losses. New Home Construction in Minnetonka ? Victims J.S. and J.S. On May 8, 2011, J.S. and J.S. signed a $1.1 million contract with KWA for the construction of a new home in Minnetonka. J.S. and J.S. obtained a construction loan for the project and CHBT was retained to handle all loan disbursements to KWA. As with other victims in the complaint, J.S. and J.S. eventually learned that KWA had failed to pay subcontractors on their project, despite representations to CHBT that loan disbursements were being used for that purpose. By fall of 2012, over $343,000 was owed to various subcontractors, including AUM Products, Cityscape, Inc., Central Flooring, Hayes Electrical, Kalmes Mechanical, Lakeside/Riverside Plumbing, Minnesota Green, Vetter Stone Company, and numerous others. As a result of KWA's failure to use the monies of J.S. and J.S. to pay subcontractors, the victims ended up paying a number of subcontractors more than once, thereby suffering serious financial losses. Home Remodel in Eden Prairie ? Victims M.E. and J.E. On August 12, 2011, M.E. and J.E. entered into a $108,000 contract with KWA to remodel their Eden Prairie home. As with other victims, funds were disbursed to KWA for the purpose of paying subcontractors on M.E. and J.E.'s remodeling project. Yet KWA failed to pay these subcontractors and M.E. and J.E. ultimately had to pay a number of contractors more than once in order to remove liens on their property. By fall of 2012, subcontractors were owed over $78,000. These subcontractors included Allstar Construction, Structures Residential Framing, Riverside Plumbing, Hayes Electrical, Gopher State Concrete, Inc., and others. As a result of Defendants' conduct, the victims suffered serious financial losses and hardship. Home Remodel in Minnetonka ? Victims W.D. and C.M. On August 12, 2011, W.D. and C.M. entered into a $421,000 contract with KWA to remodel their Minnetonka home. W.D. and C.M. paid for the project out of their own funds. As with other victims, funds were disbursed to KWA for the purpose of paying subcontractors on the remodeling project. Yet KWA failed to pay these subcontractors and W.D. and C.M. ultimately had to pay a number of contractors more than once in order to remove liens on their property. By fall of 2012, subcontractors were owed over $104, 000. These included Shaw Stewart Lumber Company, JC Cabinets, LLC, Stowell Tile, and others. As a result of Defendants' conduct, the victims suffered serious financial losses and hardship. Additionally, in order for KWA to receive funds for this this project, SIVERSON forged numerous lien waivers. Various subcontractors, including Shaw Stuart Lumber Co., JC Cabinets, LLC, and Stowell Tile, among others, purportedly signed these lien waivers. Between September 2011 and March 2012, for example, SIVERSON forged lien waivers totaling over $43,000; these were purportedly signed by Shaw Stuart Lumber Co., but in fact were manufactured and signed by SIVERSON. During the course of a non-custodial interview of SIVERSON, he admitted forging approximately 20 lien waivers on the project. New Home Construction in Minnetonka ? Victim S.P. On February 27, 2012, S.P. entered into a $714,000 contract with KWA to build his new Minnetonka home. As with other victims, funds were disbursed to KWA for the purpose of paying subcontractors. Yet

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KWA failed to pay these subcontractors and S.P. ultimately had to pay a number of contractors more than once in order to remove liens placed on the property. By fall of 2012, subcontractors were owed over $75,000. The subcontractors included a number of the same ones who provided labor and materials on the projects of other victims. As a result of the Defendants' conduct, S.P. suffered serious financial losses and hardship. The Blessing House ? Worship Center in Victoria, Minnesota In statements to your Complainant, WATERS claimed that he learned in August 2012 that KWA had not paid subcontractors on this project. WATER also stated that he learned that SIVERSON had forged lien waivers of subcontractors who worked on the project, and that by August 2012, KWA owed nearly $200,000 to subcontractors that had provided labor and materials in building the worship center. Despite learning that SIVERSON had forged lien waivers on this project, WATERS continued to work with SIVERSON and SIVERSON remained a co-owner of KWA. Statements by Defendants In addition to admitting to forging approximately 20 lien waivers on the W.D. and C.D. project, SIVERSON stated to your Complainant that he forged lien waivers in most of the other projects cited in this complaint. During a non-custodial interview, SIVERSON admitted to forging a number of lien waivers in The Blessing House project, approximately 50 on the J.S and J.S. project, approximately 30 on the S.P. project, and 2 forged lien waivers on the M.E. and J.E. project. In his statement to your Complainant, WATERS claimed that he was unaware until August 2012 that KWA was not paying subcontractors. However, a former employee of KWA, G.W., stated, in substance, that WATERS had told her in the mid-2000s that KWA was in financial trouble. And a representative of Fireside Hearth and Home, S.W., had several conversations with both WATERS and SIVERSON in 2010 about past payments owed to the subcontractor. And Cityscape, a subcontractor, spoke with both WATER and SIVERSON about not being paid on the M.A. and L.A. project prior to August 2012. For these reasons, and the circumstances and evidence described in this complaint, your Complainant believes that WATERS knew that KWA had failed to pay subcontractors on the projects of victims cited in this complaint.

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SIGNATURESANDAPPROVALS

ComplainantrequeststhatDefendant,subjecttobailorconditionsofrelease,be:(1)arrestedorthatotherlawfulstepsbetakentoobtainDefendant'sappearanceincourtor(2)detained,ifalreadyincustody,pendingfurtherproceedingsandthatsaidDefendantotherwisebedealtwithaccordingtolaw.

Complainant MarkLStock ElectronicallySigned:6/3/2014Detective14600MinnetonkaBlvdMinnetonka,MN55345Badge:116

Subscribedandsworntobeforetheundersigned.

NotaryPublicorJudicialOfficial

Commissionexpires:01/31/2015ElectronicallySigned:6/3/2014

NancySWalshRecordsSecretary,CountyofHennepin14600MinnetonkaBlvdMinnetonka,MN55345NotaryID:20249266

Beingauthorizedtoprosecutetheoffensescharged,Iapprovethiscomplaint.

ProsecutingAttorney ElectronicallySigned:5/29/2014EmeryAdoradio300S6thStMinneapolis,MN55487(612)3485550

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FINDINGOFPROBABLECAUSEFrom the above sworn facts, and any supporting affidavits or supplemental sworn testimony, I, the Issuing Officer, have

determined that probable cause exists to support, subject to bail or conditions of release where applicable, Defendants arrest

or other lawful steps be taken to obtain Defendants appearance in court, or Defendants detention, if already in custody,

pendingfurtherproceedings.Defendantisthereforechargedwiththeabovestatedoffense(s).

SUMMONSX

THEREFORE YOU, THE DEFENDANT, ARE SUMMONED to appear on ________ ___, _____ at _____ AM/PM before the above-named court at 401 Fourth Avenue S, Minneapolis, MN 55415 to answer this complaint.

IFYOUFAILTOAPPEARinresponsetothisSUMMONS,aWARRANTFORYOURARRESTshallbeissued.

WARRANT

To the Sheriff of the abovenamed county or other person authorized to execute this warrant: I order, in the name of the State

of Minnesota, that the Defendant be apprehended and arrested without delay and brought promptly before the court (if in

session), and if not, before a Judge or Judicial Officer of such court without unnecessary delay, and in any event not later than

36hoursafterthearrestorassoonassuchJudgeorJudicialOfficerisavailabletobedealtwithaccordingtolaw.

ExecuteinMNOnly ExecuteNationwide ExecuteinBorderStates

ORDEROFDETENTION

Since the Defendant is already in custody, I order, subject to bail or conditions of release, that the Defendant continue to bedetainedpendingfurtherproceedings.

Bail:$35,000.00ConditionsofRelease:

ThiscomplaintisissuedbytheundersignedJudgeasofthefollowingdate:June3,2014.

JudicialOfficer JohnMcShane

ElectronicallySigned:6/3/2014

SworntestimonyhasbeengivenbeforetheJudicialOfficerbythefollowingwitnesses:

COUNTYOFHENNEPINSTATEOFMINNESOTA

StateofMinnesotaPlaintiff

vs.

CARTERDEANSIVERSONDefendant

Clerk'sSignatureorFileStamp:

RETURNOFSERVICEIherebyCertifyandReturnthatIhaveservedacopyofthis

SummonsupontheDefendanthereinnamed.

SignatureofAuthorizedServiceAgent:

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carter siverson complaint

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