Due to the COVID-19 pandemic, the Petrofund Board will meet remotely. Check the Petrofund website for more information:

https://mn.gov/commerce/industries/fuel/petrofund/

Petroleum Tank Release Compensation (Petrofund) Board Special Meeting Date: Wednesday, September 22, 2021 Time: 9:00 AM

Agenda

A. Review of Omni Environmental, Inc. applications for consultant and contractor registration Next Petrofund Board Regular Meeting Wednesday, November 10, 2021 – 10:00 AM Minnesota Department of Commerce 85 7th Place East, St. Paul, MN 55101 Golden Rule Building, Lower Level Room 35 Note: This meeting may be held remotely. Check the Petrofund website for updates: https://mn.gov/commerce/industries/fuel/petrofund/

Minnesota Department of Commerce 85 7th Place East, St. Paul, MN 55101

Golden Rule Building, Lower Level Room 35 (Go to Front Desk on Skyway Level for escort to Lower Level)

Petroleum Tank Release Compensation (Petrofund) Board Special Meeting

A. Review of Omni Environmental, Inc. applications for consultant and contractor registration

Memo Date: September 9, 2021 To: Petrofund Board From: Joel Fischer, Petrofund Director Subject: Petrofund Board Special Meeting - Consideration of Omni Environmental, Inc.'s

applications for registration as a Petrofund consultant and contractor ______________________________________________________________________________________ The purpose of the special meeting scheduled for Wednesday, September 22, 2021 is to review the applications submitted by Omni Environmental, Inc. (Omni) for registration as a Petrofund consultant and contractor. Omni was previously registered as a Petrofund consultant and contractor until July 8, 2015, when the Board denied the company's request to renew its registration applications. The reasons for the Board's determination are described in the attached excerpt from the minutes of that meeting (Attachment 1). On January 28, 2021, Department of Commerce (Commerce) staff received the attached applications from Omni for registration as a Petrofund consultant and contractor (Attachment 2). On March 22, 2021, Commerce staff sent the attached letter to Omni informing the company that the registration applications would be reviewed by the Board (Attachment 3). Commerce staff explained in the letter that it would be recommending to the Board that the applications be denied and provided the reasons for the recommendation. Commerce staff gave Omni the opportunity at that time to provide additional information in support of its registration applications. On August 7, 2021, Commerce staff received the attached letter from Omni providing additional information in support of their registration applications (Attachment 4). The new information provided by Omni does not change Commerce staff's position. Based on the available information, Commerce staff recommends denial of Omni's registration applications for the reasons identified in our March 22, 2021 letter. Copies of the following documents are included in this meeting information packet for reference purposes: • Attachment 1: An excerpt from the July 8, 2015 Petrofund Board meeting minutes; • Attachment 2: Omni's applications for consultant and contractor registration and attachments; • Attachment 3: Commerce staff's March 22, 2021 letter and attachments; and • Attachment 4: Omni's August 7, 2021 letter and attachment.

If you have any questions or need any additional information, please let me know. Thank you.

Attachment 1: An excerpt from the July 8, 2015 Petrofund Board meeting minutes

Petroleum Tank Release Compensation Board Meeting July 8, 2015 Page 3 of 7

• the 15% reduction ($533.73) for failure to comply with leak detection and spill prevention/overfill protection requirements [Minn. Rule 2890.0065]; and

• the 5% reduction ($177.91) imposed on the active remediation costs for failure to submit a proposal for Petrofund pre-approval [Minn. Rule 2890.2000, subp. 5].

Ms. Hankerson noted that the items being appealed in this application were similar to the previous one. Ms. Hankerson moved, Ms. Ludwigson seconded, to table the reductions related to travel time and SVE system repair, allowing 30 days to provide additional information to staff, and to accept the staff recommendation on the remaining items. The motion carried 5-0. 3. Kolokithas & Sons, Inc. Leak #19321 Analyst: Katherine Roelke Mr. Kolas and Mr. Gikas appeared before the Board to appeal the following reductions recommended by Petrofund staff:

• the costs for soil vapor extraction (SVE) system rental (totaling $3,750.00) that had not been established as reasonable [Minn. Stat. §115C.09, subd. 3];

• the costs for data reduction and emissions calculations that exceeded the proposed costs for those tasks (by a total of $630.00) without an explanation [Minn. Rule 2890.2100, subp. 1];

• the costs for travel time ($297.50) that had not been established as reasonable [Minn. Stat. §115C.09, subd. 3];

• the 15% reduction ($1,251.80) for failure to comply with leak detection and spill prevention/overfill protection requirements [Minn. Rule 2890.0065]; and

• the 5% reduction ($417.27) imposed on the active remediation costs for failure to submit a proposal for Petrofund pre-approval [Minn. Rule 2890.2000, subp. 5].

Ms. Hankerson noted that the items being appealed in this application were similar to the previous one. Ms. Hankerson moved, Ms. Ludwigson seconded, to table the reductions related to travel time and SVE system rental, allowing 30 days to provide additional information to staff, to reduce the reduction for failure to comply with leak detection and spill/overfill protection from 15% to 5%, and to accept the staff recommendation on the remaining items. The motion carried 5-0.

C. Consideration of Request for Renewal of Consultant Registration Mr. Gikas appeared before the Board to discuss Omni’s application for registration as a Petrofund consultant that was received on May 29, 2015. Mr. Fischer clarified that because of the circumstances surrounding Omni’s registration application, it was considered incomplete until the Board was able to review the application and supporting documentation and obtain additional information, as necessary, from staff and Omni personnel at the Board meeting. Mr. Fischer explained the staff’s recommendation that Omni’s registration as a Petrofund consultant not be renewed based on violations of three consultant registration requirements:

(5) has been convicted, whether by pleading guilty, with or without admitting guilt, or pleading nolo contendere, of any of the following offenses: any felony; any gross misdemeanor; or a misdemeanor involving: (i) assault; (ii) harassment; (iii) moral turpitude; or (iv) conduct similar to items (i) to (iii) [Minn. Stat. §115C.11, subd. 1(i)(5)];

(3) has engaged in any fraudulent, coercive, deceptive, or dishonest act or practice whether or not

the act or practice involves the business of environmental consulting or contracting [Minn. Stat. §115C.11, subd. 1(i)(3)]; and

Petroleum Tank Release Compensation Board Meeting July 8, 2015 Page 4 of 7

(1) does not intend to or is not in good faith carrying on the business of an environmental

consultant or contractor [Minn. Stat. §115C.11, subd. 1(i)(3)];

Mr. Fischer indicated that Mr. Gikas, owner and President of Omni, had pled guilty to a felony charge of making and subscribing a false tax return. Mr. Fischer also indicated that Omni was not in good faith carrying on the business of an environmental consultant by refusing in two cases to present or make reasonably available any financial records “which are relevant to determining the validity of the costs listed in the application,” as required by Minn. Stat. §115C.09, subd. 7. Mr. Gikas responded that the tax evasion issue occurred in 2007, involving a property sale with a person who was a criminal. Mr. Gikas stated that he had made a mistake, but that he needed the money from the sale to cover a $30,000.00 bill from the Minnesota Department of Human Services for medical services for his mentally and physically handicapped child. Mr. Gikas claimed that because the Petrofund requires information and documentation from Omni and its clients not required from other applicants and consultants, he had at times refused to submit requested information to Petrofund staff. Ms. Hankerson moved to deny Omni’s application for renewal as a registered Petrofund consultant, with the understanding that the costs for Omni to complete and submit reports to the MPCA related to data gathered up to the date of the Board meeting would be considered eligible for reimbursement. Mr. Hefner asked if the Board’s determination permanently prohibited Omni from registration as a Petrofund consultant. Mr. Tostengard responded that the Board’s determination pertained only to the pending application. Mr. Kanner asked whether a non-renewal determination by the Board would apply to both Omni and Mr. Gikas. Mr. Fischer replied that the Petrofund’s consultant registration requirements apply only to companies and not individuals. Mr. Kanner seconded the motion. Mr. Gikas asked for twenty to thirty days to transfer his client contracts over to the new company he would be working for. Mr. Fischer clarified that because Omni’s clients would be switching to a new consultant, they would need to meet the Petrofund competitive bidding and/or proposal requirements, depending on what step of work they were at in their respective projects. The motion carried 5-0. Mr. Kelley called for a recess at 11:50 a.m.. Mr. Hefner left the meeting at that time. Mr. Kelley called the meeting back into order at 12:05 p.m..

D. Consideration of Environmental Lien Filings 1. Robert & Rose Doyle Leak #15546 Analyst: Colleen Schiltz Nobody was present on behalf of the responsible person. Ms. Hankerson moved, Ms. Ludwigson seconded, to approve the Department of Commerce to file an environmental lien in the amount of $1,376.58 against the leaksite property, which amounts to 10% of the eligible costs incurred by the MPCA. The motion carried 4-0. Mr. Tostengard left the meeting at 12:10 p.m.. 2. MDW Equity, LLC Leak #18925 Analyst: Colleen Schiltz Nobody was present on behalf of the responsible person.

Attachment 2: Omni Environmental Inc.'s applications for consultant and contractor registration and attachments

m S?ilHif,?'*,

Application for Registration with the Petrofund Board as a Consultant

Under Minnesota Statutes Chapter 115C,11, all consultants who perform corrective action services in

response to a petroleum tank release must register with the Petrofund Board. "Consultant" means anindividual, partnership, association, private corporation, or any other legal entity that actually performsconsulting services, which include the rendering of professional opinion, advice, or analysis regarding a

release. As part of complying with the required registration criteria, consultants must complete thisform and submit it together with the indicated documentation.

Registration is effective 30 days after a complete application is received by the Board and remains inforce until any one of the following occurs:o the applicant's professional liability coveraBe, which must include pollution impairment liability

coverage, expires;o the applicant voluntarily terminates their registration; oro the applicant's registration is suspended or revoked by the Commissioner of Commerce or the

Petrofund Board.

1. APPLICANT I N FORMATION

Full name of legal entity applying for ration:

Doing Business As (DBA):

Address abCity state t////Phone

Primary Con

legal Entity (check one)

n Sole Proprietorship

n General Partnership

f, Corporation

n Other legal entity

*lf you are a legal entity that is required to be registered with the Office of the Minnesota Secretary ofState, your registration with their agency must be current in order to file or renew your Petrofundregistration.

tr Limited Liability Partnership

I Limited Partnership

tr Limited Liability company

Page 1

Background Questions

L, Has the legal entity, or any owner, partner, officer, director or manager of the legal entity, ever beenconvicted, whether by pleading guilty, with or without admitting guilt, or pleading nolo contendere,of any of the following offenses: any felony; any gross misdemeanor; or a misdemeanor involving:(a) assault; (b) harassment; (c) moralturpitude; or (d) conduct similarto items (a)to (c)?

M ves. Please provide a detailed description of the offense(s). Tryx €ucts,)n Ai tL,*1 ,,r/itl J^,^,tr No. 6a* tl4is"{a.u.+u*h /{r*,,*,*t **yg:.:?U r4X 'r rrzu*r c*fi

c)t\21

2. Has the legal entity, or any owner, partner, officer, director or manager of the{egal entity, ever beensubject of an order revoking, suspending, restricting, limiting, or imposing other disciplinary actionagainst the legal entity's license or certification in another state or jurisdiction?

! Yes. Please provide a detailed description of the order(s).

tr No.

2. BRANCH OFFICES

Please provide the following information for any branch offices that perform work at cleanup sites inMinnesota. Attach additional sheets if necessary.

Branch Office #1

Address

City State_ Zip

Email

County.

Phone

Primary contact.

Branch Office #2

Address

City. State_ Zip

Email

County.

Phone

Primary contact

Branch Office #3

Address

City. State_ Zip County.

Phone Email

Primary contact

Page 2

3. CERTIFICATION

As legally certified with the authorized signature below, the legal entity identified in Part I above makesthis application for registration with the Petrofund Board as a consultant and:

o certifies knowledge of and agrees to abide by the requirements of Minnesota Statute Chapter115C and Minnesota Rule 2890;

. agrees to retain and make available for inspection all corrective action records for seven years;

. agrees to maintain professional liability coverage, including pollution impairment liability, andagrees to submit a certificate or certificates verifying the existence of the required insurancecoverage*; and

. agrees to file a corrected application for registration within 30 davs if any of the information inthis application becomes inaccurate or incomplete in any material respect.

*Please note that the company name listed as the "lnsured" on the Certificate of lnsurance must be identical tothe company name listed on this registration application. The "Certificate Holder" section of the Certificate oflnsurance must indicate: State of Minnesota, Department of Commerce/Petrofund, 85 - 7th Place East, Suite280, St. Paul, MN 55101-2198.

NOTARIZATION

Subscribed and sworn to before me this '28 day ofAuthorized signature

Name(print) /btll Gbstt" Pfr-s;{l'a't,"*,,u "0 / f a6f zozt Commission Expiration Date o\-3,\ - )r:t\

-.f:ti:.. AISHA A ABDIi-li*i NoIARYPUBLtc-MTNNESoTA="L,:"lJ My coMr,trssloN ExPIRES0l 31r20

4. FORM SUBMITTAL INSTRUCTIONS

Submit (mail, fax or email) the following documents:

o this completed form that has been signed, dated and notarized; and

o the certificate(s) verifying the existence of the required insurance coverage.

Please note that origina! signatures are no !onger required.

MAILING ADDRESS:

Minnesota Department of Commerce - Petrofund85 Seventh Place East, Suite 280St Paul, MN 55101-2198EMATL ADDRESS: petrofund. commerce@ state. m n. us

FOR OFFICE USE ONLY Petrofund Consultant Registration Number

Pagc 3

m 8?ilIi[:'*,

Application for Registration with the Petrofund Board as a Contractor

Under Minnesota Statutes Chapter 115C.11, all contractors who perform corrective action services in

response to a petroleum tank release must register with the Petrofund Board. "Contractor" means an

individual, partnership, association, private corporation, or any other legal entity that actually performs

contractor services, which are services within a scope of work that can be defined by typical writtenplans and specifications, such as excavation, treatment of contaminated soil and groundwater, drilling,

laboratory analysis, professional surveying, electrical work, plumbing, and carpentry. As part ofcomplying with the required registration criteria, contractors must complete this form and submit it

together with the indicated documentation.

Registration is effective 30 days after a complete application is received by the board and expires

everv two vears on the anniversarv date of the most recent registration. Prior to its bi-annual

expiration, a registration remains in force until voluntarily terminated by the registrant or until

suspended or revoked by the Commissioner of Commerce or the Petrofund Board. lf you have

questions, please contact the Petrofund !nformation Line at 651-539-1515 or 800'638-0418.

1. APPLICANT I N FORMATION

Full name of legal entity applying for registration:

Doing Business As (DB

stated{A) zip {c;?'b

Primary contact,

Legal Entity (check one)

tr Sole Proprietorship

n General Partnership

E Corporation

n other legal entity

*lf you are a legal entity that is required to be registered with the Office of the Minnesota Secretary of

State, your registration with their agency must be current in order to file or renew your Petrofund

registration.

tr Limited Liability Partnership

tr Limited Partnership

tr Limited Liability company

Page I

1.

Background Questions

Has the legal entity, or any owner, partner, officer, director or manager of the legal entity, ever beenconvicted, whether by pleading guilty, with or without admitting guilt, or pleading nolo contendere,of any of the following offenses: any felony; any gross misdemean or; or a misdemeanor involving:(a) assault; (b) harassment; (c) moral turpitude; or (d) conduct similar to items (a) to (c)?

ffi Ves, Please provide a detailed description of the offense(s), including documentation, 74X l.odl,,r.r, .y'i

tr No. &.rr.l,, ,1.(n7{p4^4r,,tt.^,. ifq1,..7-9.,r-^.:;l' ft lJ,r,.!,,rt,,1"r.1 .,1r,",,,r 'it (', ( ,i; "..... ",!,,, ( ri,\, l, r I ril,trvr s ] lly

Hasthe legal entity, oranyowner, partner, officer, directoiormanalerof the legalentity, everrdeen I?-y,:i.,,,subject of an order revol<ing, suspending, restricting, limiting, or imposing other disciplinary action ' ,<,tii''

against the legal entity's license or certification in another state or jurisdiction?

Yes. Please provide a detailed description of the order(s), including documentation.No.

2. BRANCH OFFICES

Please provide the following information for any branch offices that perform work at cleanup sites inMinnesota, Attach additional sheets if necessary.

Address

City State County

Phone Email

Primary contact

2.

trtr

zip

Branch Office #2

Address

City State zip

Email

County

Phone

Primary contact.

Branch Office #3

Add ress

City. State

Phone Email

Primary contact

zip County.

Page 2

3. CERTIFICATION

As legally certified with the authorized signature below, the legal entity identified in Part I above makesthis application for registration with the Petrofund Board as a contractor and:

o certifies knowledge of and agrees to abide by the requirements of Minnesota Statute Chapter115C and Minnesota Rule 2890;

. agrees to retain and make available for inspection all corrective action records for seven years;

and. agrees to file a corrected application for registration within 30 davs if any of the information in

this application becomes inaccurate or incomplete in any material respect.

NOTARIZATION

Subscribed and sworn to before me this_day of

Commission Expiration n"1" a\ '-'}'' - 2-.L -)-'\

zed signature

_.,$3, ATSHAAABDT'r:ttii; ,i NoIARY PUBLIC - MINNESoIA'".,-".-" My CoMM|SS|oN EXP|RES 0l/31/20

4. FORM SUBMITTAL INSTRUCTIONS

Submit this completed form that has been signed, dated and notarized. Please note thatoriginal signatures are no longer required.

Mattrue ADDRESS:

Minnesota Department of Commerce - Petrofund85 Seventh Place East, Suite 280St Paul, MN 55101-2198Eunt ADDREss: petrof u n d. com merce @ state. m n. us

FOR OFFICE USE ONLY: Petrofund Contractor Registration Number.

Page 3

ACO.r.if. GERTIFICATE OF LIABILITY INSURANCEDATE (MM/DD/YYYY)

6/|/2020THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTTTUTE A CONTRACT BETWEEN THE |SSU|NG TNSURER(S), AUTHORTZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: lf the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.lf SUBROGATION lS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

PRODUCER

G&L InsuranceGroup

3224 6th Ave NE

Rochester MN 55906

NAME: I aDatlla rlollulld

F.*.obo,[r,(rrli,r*..u,,,INSURER(S) AFFORDING COVERAGE NAIC #

INSURER A: EVANSTON INS CO 3 5378

INSURED

Onrni Environmental Inc

2IO I5TH STNE

ROCHESTER MN 55906-7026

INSURER B :

INSURER C :

INSURER D :

INSURER E I

INSURER F

CERTIFICATE NUMBER:THE POLICIES OF INSURANCE LISTED BELOW

INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSUMNCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

COMMERCIAL GENERAL LIABILITY

.LA,M.-MADE l7lo..r*PRO}-ES SI ONAL LIA BI LITY

GEN'L AGGREGATE LIMIT APPLIES PER:

::::I E'# l-r'o"

MKLV3ENVIOI880

AUTOMOBILE LIABILITY

ANY AUTO

OWNED T'-"]SCHEDULEDAUTOS ONLY I IAUTOSHIRED F rlorl-owrueoAUTOS ONLY I I AUTOS ONLY

BODILY INJURY (Per accident)

OCCUR

CLAIMS.MADE

EMPLOYERS' LIABILITY

E,L. DISEASE - EA EMPLOYEE

E.L. DISEASE. POLICY LIMIT

MKLV3ENVIOI S8O

1.000,000

1,000,000

DESCRIPTION OF OPERATIONS / LOCATIONS i VEHICLES (ACORD 1 01, Additlonal Remarks Schedule, may be attached if more space is required)

See ACORD l0l

Omni Environmental Inc

2IO I5fi StNE

Rochcstcr MN 55906

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE

..Jrrw.e.1 1- l+tc.1

@ 1988-2015 ACORD CORPORATION. All rights reserved,

The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03)

AGENCY CUSTOMER ID:

LOC #:

ADDITIONAL REMARKS SCHEDU LE Page 1 of 1

AGENCY

G&L lnsuranceGroup

NAMED INSURED

Omni Environmental lncPOLICY NUMBER

CARRIER NAIC CODE

EFFECTIVE DATE:

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM,

FORM NUMBER: 25 FORM TITLE: Certificate Of Liability lnsurance

Policy includes: Blanket Additional lnsured - Primary & Non-Contributory - Owners, Lessees or Contractors / Additional lnsured - Owners, Lessees orContractors - Completed Operations when required by written contract signed by both parties and executed prior to commencement of operations ** FORINFORMATIONAL PURPOSES ONLY, NOT FOR DISTRIBUTION *. Please contact G&L with the Certholder Name and Mailing Address for additionalcertificates.

ACORD 101 (2008/01) @ 2008 ACORD CORPORATION. All rights reserved.

The ACORD name and logo are registered marks of ACORD

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

INSURER(S) AFFORDING COVERAGE

INSURER F :

INSURER E :

INSURER D :

INSURER C :

INSURER B :

INSURER A :

NAIC #

NAME:CONTACT

(A/C, No):FAX

E-MAILADDRESS:

PRODUCER

(A/C, No, Ext):PHONE

INSURED

REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

OTHER:

(Per accident)

(Ea accident)

$

$

N / A

SUBRWVD

ADDLINSD

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIODINDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

$

$

$

$PROPERTY DAMAGE

BODILY INJURY (Per accident)

BODILY INJURY (Per person)

COMBINED SINGLE LIMIT

AUTOS ONLY

AUTOSAUTOS ONLYNON-OWNED

SCHEDULEDOWNED

ANY AUTO

AUTOMOBILE LIABILITY

Y / N

WORKERS COMPENSATIONAND EMPLOYERS' LIABILITY

OFFICER/MEMBER EXCLUDED?(Mandatory in NH)

DESCRIPTION OF OPERATIONS belowIf yes, describe under

ANY PROPRIETOR/PARTNER/EXECUTIVE

$

$

$

E.L. DISEASE - POLICY LIMIT

E.L. DISEASE - EA EMPLOYEE

E.L. EACH ACCIDENT

EROTH-

STATUTEPER

LIMITS(MM/DD/YYYY)POLICY EXP

(MM/DD/YYYY)POLICY EFF

POLICY NUMBERTYPE OF INSURANCELTRINSR

DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

EXCESS LIAB

UMBRELLA LIAB $EACH OCCURRENCE

$AGGREGATE

$

OCCUR

CLAIMS-MADE

DED RETENTION $

$PRODUCTS - COMP/OP AGG

$GENERAL AGGREGATE

$PERSONAL & ADV INJURY

$MED EXP (Any one person)

$EACH OCCURRENCEDAMAGE TO RENTED

$PREMISES (Ea occurrence)

COMMERCIAL GENERAL LIABILITY

CLAIMS-MADE OCCUR

GEN'L AGGREGATE LIMIT APPLIES PER:

POLICYPRO-JECT LOC

CERTIFICATE OF LIABILITY INSURANCEDATE (MM/DD/YYYY)

CANCELLATION

AUTHORIZED REPRESENTATIVE

ACORD 25 (2016/03)

© 1988-2015 ACORD CORPORATION. All rights reserved.

CERTIFICATE HOLDER

The ACORD name and logo are registered marks of ACORD

HIREDAUTOS ONLY

Rochester MN 55906

210 15th St NE

Omni Environmental Inc

** FOR INFORMATIONAL PURPOSES ONLY, NOT FOR DISTRIBUTION **

Please contact Harmony Insurance Group with the Certholder Name and Mailing Address for additional certificates.

1,000,000EA CONDITION

1,000,000AGGREGATE

06/03/202206/03/2021MKLV3ENV101880POLLUTION LIABILITY

A

1,000,000

1,000,000

1,000,000

1,000,000

5,000

50,000

1,000,000

06/03/202206/03/2021MKLV3ENV101880

✘

✘✘

A

35378EVANSTON INS CO

55906-7026MNROCHESTER

210 15TH ST NE

Omni Environmental Inc

tabatha@harmonyinsurancegroup.com

5078862100

Tabatha Hollund

55906MNRochester

3224 6th Ave NE

Harmony Insurance Group

6/17/2021

112812021 Business Filing Search

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Attachment 3: Minnesota Department of Commerce staff's March 22, 2021 letter and attachments

TINITED STATES OF AMERICA, )

UNITED STATES DISTRICT COURTDISTRICT OF MINNESOTA

)))))

, Plaintiff,

v.

MAT"THEW NICHOLAS GIKAS'

Defenoant.)

THE UNITED STATES GRAND JURY CHARGES THAT:

BACKGROUND

l.Atalltimesrelevanttothislndictment,defendantMatthewNicholasGikas

("Gikas") was a resident of Rochester, Minnesota'

2'.Atalltimesrelevanttothislndictment,defendantGikaswastheChief

ExecutiveofficerandmajorityshareholderofomniEnvironmental,Inc.(..omni

Environmental"), an environmental services corporation located in Rochester' Minnesota'

3.Inoraroundlgg8,defendantGikasestablishedGikas,L.L.C.,aMinnesota

limitedliabilitycompany.Asof200T,GikasL.L.C'ownedandoperatedcommercialreal

prope4yl0l4BelAirLaneNorthwest,Rochester,Minnesotathatservedasthephysical

location of Omni Environmental and other unrelated businesses'

FACTUAL ALLEGATIONS

4.Atalltimesrelevanttothislndictment,defendantGikasdistributed

marijuana, a controlled substance, to others in exchange for money' In or around 2007'

defendant Gikas began to obtain marijuana for use and resale from an individual (herein

rNDrcrMENr cR lrl-1./7 h5rdfl\l8 u.s.c. $ l00lr8 u.s.c. $ 1956(h)

2l U.S.c. $ 8a1(a)(l)21 U.S.C. $ 841 (bxl)(c)

) 2t u.s.c. $ 846

) 26 U.S.C. $ 7206(t)

)

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 1 of 8

U.S. v. Mafthew Nicholas Cikas

"Co-Conspirator A"), a wholesale marijuana dealer based in the Rochester, Minnesota

area. Co-Conspirator A sold large quantities of marijuana to various customers,

generating hundreds of thousands of dollars in drug trafficking proceeds. Seeking to

conceal and disguise the true nature and source of his drug proceeds, Co-Conspirator A

co-rningled drug trafficking proceeds with the other proceeds, used it to purchase real and

personal properfy for his legitimate business ventures, and arranged other transactions

designed to hide his illegally obtained proceeds,

5. For example, in or about December 2007, defendant Gikas agreed to sell a

5O-percent ownership interest of Gikas L.L.C. to Co-Conspirator A for $73,799.20.

Defendant Gikas and Co-Conspirator A further agreed to structure this transaction to

conceal the true purchase price and the source of the funds Co-Conspirator A used to

affect the purchase. Specifically, Defendant Gikas and Co-Conspirator A executed a

written Membership Interest Purchase Agreement that recited a false purchase price of

$5S,799.20 and verbally agreed that Co-Conspirator A would provide the remaining

$15,000.00 of the true purchase price through periodic cash payments during 2008'

Thereafter, Co-Conspirator A provided defendant Gikas a cashier's check in the amount

of$20,000.00 and executed a note for $38,799,20, towards the false purchase price. In

addition, during 2008 Co-Conspirator A provided defendant Gikas either occasional cash

payments or reduced the debt that defendant owed for quantities of marijuana. The total

approximate value of these payments and reductions was $15,000.00.

6. As an additional example, on or about December 31, 2007, defendant

Gikas, who then owned 100 percent of the outstanding voting common stock ("common

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 2 of 8

U.S. v. Matthew Nicholas Gikas

stock") of Omni Environmental, agreed to sell one-third of the common stock of Omni

Environmental to Co-Conspirator A. Defendant Gikas and Co-Conspirator A further

agreed to structure this transaction to conceal the true purchase price and the source of

funds Co-Conspirator A used to affect the purchase' Specifically, Defendant Gikas and

Co-Conspirator A agreed upon an actual purchase price of $110,000.00 but executed a

written stock Purchase and option Agreement that recited a false purchase price of

$50,000.00, Defendant Gikas and Co-Conspirator A verbally agreed that Co-Conspirator

A would provide the remaining $55,000.00 through periodic cash payments during 2008.

7. Thereafter, Co-Conspirator A provided defendant Gikas a cashier's check

in the amount of $50,000.00, the false price for the one-third ownership interest in Omni

Environmental. In addition, Co-Conspirator A provided defendant Gikas occasional cash

payments or debt reductions totaling $55,000.00 during the year 2008'

8. Simultaneously, Co-Conspirator A was providing defendant Gikas

quantities of marijuana without requiring Gikas to immediately pay for the marijuana, a

practice known among illicit drug traffickers as "fronting," At times, Co-Conspirator A'

would reduce the amount of his cash payments to defendant Gikas by the amount Gikas

owed for the mariiuana he was "fronted,"

. 9. The business agreement or understanding between defendant Gikas and Co-

Conspirator A included Co-Conspirator A directly generating billable hours for Omni

Environmental by providing services to its customers. Beginning in approximately 2010'

Co-Conspirator A began to generate fewer billable hours for Omni Environmental than

called for by the understanding. This translated to lost profits for Omni and Gikas. To

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 3 of 8

U.S. v. Matthew Nicholas Gikas

offset these lost profits with Gikas. Co-Conspirator A began to making periodic cash

payments to defendant Gikas which totaled $7,000.00.

10. Defendant Gikas knew that Co-Conspirator A's primary source of income

was drug trafficking and further knew that most if not all ofthe funds provided to him by

Co-Conspirator A were the proceeds of the distribution of marijuana.

11. For tax year 2008, defendant Gikas signed and caused to be filed with the

InS a U.S. Individual Income Tax Return, Forms 1040, and further signed and caused to

be filed with the IRS an amended U.S. Individual Income Tax Return, Form 1040X'

12. By on or about April 15,2009, Gikas falsely stated in those returns, that his

taxable income for the calendar year 2008 was $101,885.00. Defendant Gikas well knew

at the time of those filings that his taxable income was actually $162,045.00, which

included the concealed payments in the form of Co-Conspirator A made during that

calendar year. Defendant Gikas also well knew and that if he reported his true taxable

income, he would be subject to additional taxes due and owing to the United States of

America.

13. On October 27,2011an Agent with the Criminal Investigation Division of

the IRS who was conducting an investigation approached Gikas, identified herself and

asked Gikas questions related to his relationship with Co-Conspirator A. The Agent '

asked Gikas about the transactions with Co-Conspirator A involving the sale of Gikas

L.L.C. and Omni Environmental. Cikas falsely stated to the Agent that the purchase

agreement accurately reflected the sale price ofthe entities and that Co-Conspirator A did

not pay Gikas any cash in addition to what was stated in the Membership Interest

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 4 of 8

U.S. v. Matthew Nicholas Gikas

Purchase Agreement and Stock Purchase and Option Agreement for sales ofboth entities.

When confronted, Gikas admitted that Co-Conspirator A paid him cash outside of the

Membership Purchase Agreement, but falsely stated to the Agent that the amount of castr

was approximately $20,000.00.

COUNT 1

(Conspiracy to Distribute and Possess with Intent to Distribute Marij uana)

14. Paragraphs I through 8 ofthe Indictment are realleged as ifset forth in full

herein.

15. From in or about 2008 and continuing through in or about 201l, in the State

and District of Minnesota, the defendant,

MATTHEW NICHOLAS GIKAS,

did knowingly and intentionally conspire with Co-Conspirator A and with other

persons, whose names are known and unknown, to dislribute and possess with intent to

distribute a mixture or substance containing marijuana, a controlled substance, in

violation offitle 21, United States Code, Sections 8a1(a)(1), 841(bXlXC), and 846.

COUNT2(Conspiracy to Launder Monetary Instruments)

16. Paragraphs 1 through 10 ofthe Indictment are realleged as if set forth in full

herein.

17, From on or

Minnesota, the defendant,

about 2007 through 2011, in the State and District of

MATTHEW NICHOLAS GIKAS.

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 5 of 8

U.S. v. Matthelv Nicholas Cikas

did knowingly combine, conspire and agree with other pefsons known and unknown to

the Grand Jury to knowingly conduct and attempt to conduct financial transactions

affecting interstate commerce and foreign commerce, which transactions involved the

proceeds of specified unlawful aotivity, that is, conspiracy to distribute and possess with

intent to distribute as alleged in Count l, knowing that the transactions were designed in

whole or in part to conceal and disguise the nature, location, source, ownership and

control of the proceeds of specified unlawful activity, and while conducting and

attempting to conduct such financial transactions, knew that the property involved in the

financial transaction representcd the proceeds of some form of unlawful activity, in

violation ofTitle 18, United States Code, Section 1956(h)'

18.

full herein.

19.

COUNT 3' (Making and Subscribing a False Tax Retum)

Paragraphs I through 13 of the Indictment are realleged as if set forth in

ln or about 2009. in the State and District of Minnesota, the defendant,

MATTIIEW NICHOLAS GIKAS,

did willfully make, subscribe, sign and caused to be filed with the Intemal Revenue

Service an amended U.S. Individual Income Tax Return form 1040X, for the taxable year

2008, which was verified by a written declaration that it was made under the penalties of

perjury and which he did not believe to be true and correct as to every material matter, in

that line 43 reported purported taxable income of $101,885.00 when he well knew and

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 6 of 8

U.S. v. Matthew Nicholas Gikas

believed the $101,885.00 in taxable income was fictitious and his taxable income was

higher, in violation of Title 26, United States Code, Section 7206(l).

COUNT 4(False Statement to an IRS Agent)

20. Paragraphs 1 through 13 of the Indictment are realleged as if set forth in

full herein.

21. On or about October 27,201). in the State and District of Minnesota, the

defendant,

MATTHEW NICHOLAS GIKAS,

did willfully make a materially false, hctitious, and fraudulent statement to a Special

Agent of the Internal Revenue Service's Criminal Investigation Division ("IRS-C|'), a

department and agency of the United States, in a matter within the jurisdiction of IRS-CI,

when the defendant stated to the Special Agent that Co-Conspirator A did not pay

defendant any additional cash for the purchase of shares of Omni Environmental and

Gikas L.L.C. beyond the stated amounts set forth in the Membership Interest Purchase

and Stock Purchase Agreements for sales ofboth entities, a statement the defendant then

and there knew full well to be false.

All in violation of Title 18, United States Code, Section 1001.

FORFEITURE ALLEGATIONS

The allegations in Counts I and 2 are realleged and incorporated by reference for

the purpose of alleging forfeitures pursuant to Title 21, United States Code, Section 853

and Title 18, United States Code, Section 982(a)(l).

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 7 of 8

U.S. v. Matthew Nicholas Gikas

Upon conviction of Count I of this Indictment, the defendant shall forfeit to the

United States, pursuant to Title 21, United States Code, Section 853(a), any property

constituting, or derived from, any proceeds obtained, directly or indirectly, as the result

of such offense and any property used, or intended to be used, in any manner or part, to

commit, or to facilitate the commission of, the off€nse'

Upon conviction of Count 2 of this Indictment, the defendant shall forfeit to the

united states, pursuant to Title 18, United states code, Section 982(aX1), any property,

real or personal, involved in such offense, and any property traceable thereto.

If any of the above-described property is unavailable for forfeiture for any of the

reasons described in Title 21, United States Code, Section 853(p), the United States will

seek the forfeiture of substitute property pursuant to Title 21, United States Code, Section

853(p) as incorporated by Title 18, United States Code, Section 982(bxl) and Title 28,

United States Code, Section 2a6l@).

A TRUE BILL

ACTING LINITED STATES ATTORNEY FOREPERSON

CASE 0:14-cr-00047-PJS-JSM Document 1 Filed 02/12/14 Page 8 of 8

CountV

By billing clients for time spent on services not actually documented in company records,

Respondents demonstrated financial irresponsibility in violation of Minn. Stat. § 45.027,

subd. 7(a)(4) (2016).

Count VI

By making misrepresentations to a client concerning the Petrofund program and rules,

Respondents demonstrated untrustworthiness in violation of Minn. Stat.§§ 45.027, subd. 7(a)(4)

(2016) and l lSC.112(10) (2016).

ORDER

NOW, THEREFORE, IT IS HEREBY ORDERED, pursuant to Minn. Stat. § 45.027,

subd. Sa, Respondents shall cease and desist from committing further violations of law, including

submitting false timesheets to the Commissioner, billing clients for time spent on services not

actually documented in company records, misrepresenting the Petrofund Program statues and

rules to clients or potential clients, and failing to respond to Department requests for information

in a complete, accurate and timely manner.

NOTICE OF RIGHT TO HEARING

IT IS FURTHER ORDERED, pursuant to Minn. Stat. § 45.027, subd. Sa (2016), that

Respondents may request a hearing in this matter. Such request shall be made in writing and

served on the Commissioner, whereupon the Commissioner shall set a date for hearing within ten

(10) days after receipt of the request unless Respondent and the Department agree to waive the

10-day time period. If no hearing is requested by Respondent within thirty (30) days of service

of this Order and none is ordered by the Commissioner, this Order will become permanent and

will remain in effect until modified or vacated by the Commissioner.

8

10/24/2017

Attachment 4: Omni Environmental, Inc.'s August 7, 2021 letter and attachment

August 7, 2021 Mr. Vern Kelley Chairman - Petrofund Board 85 Seventh Place, Suite #280 St. Paul, MN 55101 RE: Appeal of Staff Denial of Company Registration Omni Environmental, Inc.

210 – 15th Street, NE Rochester, Minnesota Dear Mr. Kelley: The intent of this letter is to provide a written appeal of the Petrofund Staff’s denial of registration for Omni Environmental, Inc. (Omni). On March 22, 2021, Mr. Joel Fischer, Executive Director of the Petrofund sent a letter denying Omni a registration as a consultant and contractor with the Petrofund. It is my understanding that the registration is a simple request to conduct work on MPCA Leaksites and is given to nearly all applicants. Omni Environmental, Inc. is a Minnesota Corporation in good standing with the State of Minnesota and has been in full operation since June 11, 2020 and was operational from 1995 to 2015. Omni is an environmental services and consulting firm that provides environmental assessments, tank removals, soil gas remediation, soil excavations, groundwater investigations, dry cleaner investigations, asbestos inspections, agricultural spills and cathodic protection testing. Omni’s owner, Mr. Matt Gikas is a Licensed Professional Geologist (PG) in the States of Minnesota (1998) and Wisconsin (1994). Mr. Gikas has also been certified as a “Certified

Professional Geologist (CPG) by the American Institute of Professional Geologist (AIPG) since 1994. I contend that many of the assertions in Joel’s letter are either not true, are misrepresented or are

simply immaterial and not relevant to a simple request for registration from the Department of Commerce (Commerce). Although, I could attempt to address many of Joel’s assertions, many of which I know to be untrue, I won’t. I contend that these assertions are moot when it comes to Omni’s registration status and are merely a smoke screen for Mr. Fischer’s personal agenda. I believe my civil rights are being violated pursuant to 42 U.S.C 1993 by Mr. Joel Fischer.

2 | P a g e

I would like the Board to consider the fact that the MN Dept of Agriculture, the MDH (Asbestos Inspector and well drillers), the ACRRA Fund, the dry cleaner fund, the Federal SBA, the State of Minnesota Board of Architecture, Engineering, Land Surveying, Landscape Architecture, Geoscience, and Interior Design Licensing Board, AIPG, and the State of Wisconsin Professional Geologist Board, Steel Tank Institute for Cathodic Protection all have no problem with Matt Gikas. I contend that this denial of registration has nothing to do with me being a felon and everything to do with Mr. Joel Fischer’s animosity toward me. Mr. Fischer doesn’t like the fact I tell clients to call their Senators and Representatives when they are unhappy with Petrofund rulings. He’s upset

that I appeal his determinations, he’s upset I forced an Audit of the Petrofund by James Noble the Legislative Auditor, and for being an overall “Whistle Blower” to the wrongs being conducted by

the Petrofund staff and Board. Clearly Mr. Fischer has a problem with me telling my clients to call their legislators. It is highly illegal to take retribution on a “whistle blower” and it is illegal to

penalize me for going to my Representative and Senators. According to the Petrofund webpage Vieau & Associates was fined $25,000 and forced to pay restitution of $50,000, yet Vieau & Associates still has their Petrofund registration. I content that if Vieau & Associates is allowed to be a Petrofund Registered Consultant and Contractor so should Omni. I believe that Omni has as much a right, if not more so, to have a Petrofund registration as Dave Vieau of Vieau & Associates (Vieua). The 14th Amendment allows me “Equal Protection” under the Law; hence if the Board can register

Vieau then it should grant Omni a registration as well. Vieau actually defrauded the PetroFund several times out of thousands of dollars and could have been charged with a Felony, had the State wanted to charge him. Dave Vieau’s signed the Petrofund Applications and he very likely knew there was bid rigging. Mr. Vieau has been a long time Civil/Geo-Tech Engineer in the Twin Cities; hence, he knew all the “Excavation Company” in the Twin Cities area. He knew that shell company didn’t exist. Why else would he agree to pay $75,000, if he wasn’t aware of the FRAUD? The Board should be aware that Vieau is currently a registered Petrofund Consultant and

Contractor. On April 5, 2010 Dave Vieau of Vieau & Associates signed a “Consent Order” as

detailed on the Petrofund Webpage. VIEAU ASSOCIATES, INC. Reg #: 2940

Action: Consent Order Signed: 4/5/2010

File #: PF 290102 GAW Penalty: $25,000 fine and $50,000 restitution

Allegation: Respondent failed to reasonably supervise its employee, to assure his compliance with

Minnesota Petrofund regulations. Specifically, the employee repeatedly circumvented the Petrofund

bidding process by requesting and reviewing competing bids prior to submitting his own bids, provided

false information to the Minnesota Department of Commerce regarding costs submitted in Petrofund

reimbursement applications, and provided inaccurate information to the Department concerning his

actions.

3 | P a g e

I would strongly encourage the Board to consider re-instating Omni Environmental, Inc.’s

registrations effective immediately. Sincerely,

Matthew N. Gikas, PG, CPG President 210 – 15th Street, NE Rochester, MN 55906 Attachment Letter from the Law Office of Daniel Voss. PPLC dated July 27, 2021 to Mr. Keith Ellis - Attorney General for the State of Minnesota.

THE LAW OFFICES OF DANIEL W. VOSS, PLLC 3109 Hennepin Avenue South Minneapolis, Minnesota 55408

Tel. 612-822-2152 Daniel W. Voss e-mail: danvoss@voss-law.net July 27, 2021 Mr. Keith Ellison Office of Minnesota Attorney General 445 Minnesota Street Suite 1400 St. Paul, MN 55101-2131 Mr. Joel Fischer Director Petro Fund Program Minnesota Department of Commerce 85 7th Place East, Suite 280 | Saint Paul, MN 55101 RE: In the Matter of Registration Applications of Omni Environmental, Inc. and notice of

legal claims My File No.: 1075-00

Dear Messrs. Ellison and Fischer: I am the attorney for Omni Environmental, Inc. and Matthew N. Gikas. I am investigating claims of civil rights violations actionable pursuant to 42 U.S.C. 1983. Joel Fischer and others have acted under color of law and have deprived my clients of their right to due process and their right to equal protection. Largely this letter is addressed to Attorney General Ellis. I have included Mr. Fischer to put him on notice that he is a potential defendant, and that he and his staff and the members of the Petro Fund Board must insure that evidence is preserved. A litigation hold should be placed on all documentary evidence that may be related to the matters referred to herein. Mr. Ellis, this matter arises out of a long standing feud between Messrs. Fischer and Gikas as well as Assistant Attorney General Michael Tostengard who may be named as a defendant. In 2011, at a time in which Mr. Fischer was the director of the Petro Fund, he and Mr. Tostengard took a frivolous and completely unsupportable position with regard to the interpretation of the Petro Fund Rules. They, without justification, forced Omni Environmental, Inc.’s client All Petro Connection to litigate a matter that should have never had to be litigated.1 This action was motivated by the personal ill will and animus of Messrs. Fischer and Tostengard towards Mr. Gikas. 1 This was not the first instance in which they had done this.

We were forced to commence a contested case proceeding and then forced to appeal the Commissioner’s erroneous conclusions of law. Mr. Tostengard represented the Board throughout the litigation. The Court of Appeals reversed the Petro Fund’s order denying reimbursement to All Petro Connection and awarded attorney fees and costs. I am enclosing a copy of the Minnesota Court of Appeals’ opinion In the Matter of the Minnesota Department of Commerce, Minnesota Petroleum Tank Release Compensation Board Appeal of All Petro Connection, Inc., and a copy of the Court’s Order awarding attorney fees and costs. The Court rejected the Board’s interpretation of its own Rule. It held that the interpretation was unreasonable. In awarding attorney fees the Court reiterated its holding:

Respondent Minnesota Department of Commerce argues that fees should be denied because the agency’s position was “manifestly reasonable and had ample justification.” In effect, the agency re-argues its position on appeal, but that position was unequivocally rejected by this court. And the agency has not addressed the language in this court’s opinion, concluding that the agency’s position was not reasonable.

[See Order dtd. 9/27/2011, copy attached.] We were forced to communicate with Attorney General Lori Swanson to recover payment of the attorney fees and costs because Mr. Tostengard was unresponsive to our demand for payment. In the All Petro Connection matter Mr. Tostengard argued to Administrative Law Judge Manuel Cervantes that Minn. R. 2890.4600, subp. 2. (A) limited the record to the evidence submitted to the Petro Fund Board. According to Mr. Tostengard parties such as All Petro Connection could not supplement the record with any witness testimony or other documentary evidence once the matter reached the contested case proceeding stage. ALJ Cervantes adopted this argument and proceeded to disallow all of the evidence All Petro Connection presented to him. The real targets of this Rule were Omni and Mr. Gikas because they had been actively pursuing reductions meted out to their clients. There was a pattern of nickel and diming Omni’s clients with frivolous reductions. The clients were forced to commence contested case proceedings to challenge these reductions and when they did Mr. Tostengard was ready with his boiler plate motion for summary disposition arguing that no further evidence could be presented. We contend that Messrs. Fischer and Tostengard blatantly subverted the legal process to give them an unfair and illegal advantage in these contested case matters. What was really absurd is that another Rule had been adopted, through their efforts, which provided that a party appealing a reduction could only supplement the record in an appeal at the Board’s discretion. The Rule specifically prohibited the presentation of witness testimony before the Board. Just as soon as the opportunity presented itself, the legality of Minn. R. 2890.4600, subp. 2. was challenged. On February 7, 2013, I commenced a declaratory judgment action on behalf of GH Holdings, LLC, in the Minnesota Court of Appeals to declare Minn. R. 2890.4600, subp. 2. invalid. In a published opinion the Minnesota Court of Appeals held that when the Minnesota Petroleum Tank Release Compensation Board adopted Minn. R. 2890.4600, subp. 2(A) (2013), it exceeded its statutory authority by purporting to limit the evidence in a contested case to the written

record. The Court held that Rule 2890.4600, subpart 2(A), directly conflicted with the provisions of Chapter 115C and the Minnesota Administrative Procedure Act and declared the Rule invalid. A copy of the Court’s opinion is enclosed. Now I am going to turn the matter of the consultant and contractor registration applications of Omni which were submitted to the Petro Fund on or about January 28, 2021. Copies of these applications are enclosed. For years the Petro Fund registration application for consultants took the following form:

The contractor form was similar albeit the application was for contractors. In 2019 the application forms were changed. A section was added entitled “Background Questions.” Although the registration is issued to the legal entity making application these Background Questions are directed to any person who is considered a manager:

According to a recent statement made by Mr. Fischer the forms were modified in 2019 based upon discussions with your office:

Mr. Fischer is now using the Background Information that Mr. Gikas furnished on his consultant and contractor registration applications to recommend to the Board that they deny these applications. On May 28, 2014, Mr. Gikas pled guilty to a single count of subscribing and filing a false tax return in 2009 for income earned in 2008. The following is a portion of the transcript of the plea proceedings held before the Honorable Ann Montgomery:

Mr. Ellis, I am enclosing the entire transcript of the plea to inform you as to the factual basis. Once Mr. Fischer learned about the conviction he, and perhaps Michael Tostengard, attempted to persuade the Minnesota Board of AELSLAGID to take action to revoke Mr. Gikas’ geologist license. These efforts were unsuccessful.2 As you should know, the Minnesota Criminal Rehabilitation Act (1974), Minn. Stat § 364.01 et seq., prohibits discrimination in public employment and licensing. Public employers and licensing agencies may not disqualify a person “solely or in part” based on criminal conviction unless 1) there is a “direct relationship” between occupation or license and conviction history, measured by the purposes of the occupation’s regulation and the relationship of the crime to the individual’s fitness to perform the duties of the position; and 2) the individual has not shown 2 Mr. Gikas has been a "Certified Professional Geologist" with the American Institute for Professional Geologists since July 1994. He was first licensed as a geologist in the State of Minnesota in 1998. He has been licensed in the State of Wisconsin as a geologist since 1995. There has never been a disciplinary action taken against him in either state.

“sufficient rehabilitation and present fitness to perform” the duties of the public employment or licensed occupation. Minn. Stat. § 364.03, subd. 1 (2021). It is incongruous for Mr. Gikas to be licensed in Minnesota as a geologist yet to deny Petro Fund registrations to Omni because of actions engaged in by Mr. Gikas that took place over a decade ago. Omni and Mr. Gikas are being illegally penalized by Mr. Fischer because of his personal animus towards Mr. Gikas. Indeed, on March 22, 2021, Mr. Fischer finally replied to Omni’s applications referencing the allegations of the indictment. These references were inappropriate and were intended to malign Mr. Gikas and prejudice the members of the Board. Because of his personal animus towards Mr. Gikas, Mr. Fischer deliberately tainted the record referencing the indictment as though the facts of the indictment were proven and that Mr. Gikas had been convicted of participating in a conspiracy to distribute marijuana. Mr. Fischer stated that the Petro Fund Staff would be recommending denial of the registrations writing as follows:

Mr. Fischer went on to cite as further grounds for denial of Omni’s applications an investigation of Chosen Valley Testing, Inc. From September 2015 to January 2020 Mr. Gikas was employed by Chosen Valley Testing. Chosen Valley Testing was issued a registration as a consultant and engaged in Petro Fund tank pulls similar to the work that Omni did. Not long after Mr. Gikas became employed by Chosen Valley Testing Mr. Fischer notified it that the Petro Fund was prepared to take enforcement action against it. He proceeded to impute conduct of Omni to Chosen Valley. He doggedly pursued Chosen Valley with regard to petty matters that related to Omni until the owner of Chosen Valley Testing, Colby Verdegan, threw up his hands and signed a Settlement Agreement. A copy of the Settlement Agreement is enclosed. Mr. Gikas was not a party or a signator to the Settlement Agreement. Omni will be asking the Board to grant it registrations as a consultant and as a contractor. If the applications are denied we will take further legal action in whatever form we deem appropriate. We will seek attorney fees and costs pursuant to the Equal Access to Justice Act. Messrs. Fischer and Tostengard have been abusing their governmental power long enough. Their actions have resulted in the adoption of illegal rules and unnecessary litigation. Mr. Ellis

we need to bring this feud to an end. If you would like to discuss this matter further kindly give me a call at your convenience. Sincerely,

Daniel W. Voss Enclosures c: Omni Environmental, Inc. Mr. Matthew N. Gikas

This opinion will be unpublished andmay not be cited except as provided byMinn. Stat. § 480A.08, subd. 3 (2010).

STATE OF MINNESOTAIN COURT OF APPEALS

A10-1812

In the Matter of the Minnesota Department of Commerce Petroleum Tank Release Compensation Board Appeal of

All Petro Connection, Inc.

Filed July 5, 2011Reversed

Halbrooks, Judge

Commissioner of CommerceOAH File No. 16-1010-20865-2

Daniel W. Voss, Minneapolis, Minnesota (for relator All Petro Connection, Inc.)

Lori Swanson, Attorney General, Michael J. Tostengard, Assistant Attorney General, St. Paul, Minnesota (for respondent Commissioner of Commerce)

Considered and decided by Halbrooks, Presiding Judge; Wright, Judge; and

Bjorkman, Judge.

U N P U B L I S H E D O P I N I O N

HALBROOKS, Judge

Relator brings this certiorari appeal, arguing that it is entitled to reimbursement of

costs expended to investigate a petroleum release. Because the rules unambiguously

allow for the requested reimbursement in this situation, we reverse.

2

FACTS

The Minnesota Pollution Control Agency (MPCA) required relator All Petro

Connection, Inc. to perform a limited site investigation (LSI) at a site of a petroleum

release. Relator sought bids for the LSI and accepted the lowest bid, which was $1,600,

from Omni Environmental, Inc. The ultimate cost for the LSI was $2,376. Relator

sought reimbursement for the LSI work and received full reimbursement from the

Minnesota Department of Commerce’s Petroleum Tank Release Compensation Board

(Petrofund). Based on its review of the LSI results, the MPCA requested a follow-up

remedial investigation (RI). Omni performed the additional RI work at a cost of $3,875.

Relator submitted its reimbursement application for this amount. Petrofund denied

$1,238 of the submitted request on the ground that the amount sought by relator exceeded

the maximum amount allowed by Minn. R. 2890.1300 (2009).

Relator appealed the denial and requested a hearing in front of the Petrofund

board. The board upheld the denial, and relator requested a contested-case hearing. An

administrative-law judge (ALJ) conducted a hearing and recommended denial of $1,238

in costs. The board’s order was subsequently upheld by respondent Commissioner of

Commerce, who adopted the ALJ’s findings of fact and conclusions of law in their

entirety. This certiorari appeal follows.

D E C I S I O N

This court may reverse an agency’s decision “if the substantial rights of the

petitioner[] may have been prejudiced because the administrative finding, inferences,

conclusion, or decisions are . . . affected by [an] error of law.” Minn. Stat. § 14.69

3

(2010). Under the Petroleum Tank Release Cleanup Act, Minn. Stat. §§ 115C.01-.13

(2010), Petrofund will generally refund up to 90% and, in certain cases, more than 90%

of corrective-action costs incurred in remediating a petroleum spill. Minn. Stat.

§ 115C.09, subd. 3(a). The act authorizes Petrofund to promulgate rules “regarding its

practices and procedures, the form and procedure for applications for compensation from

the fund, procedures for investigation of claims and specifying the costs that are eligible

for reimbursement from the fund.” Minn. Stat. § 115C.07, subd. 3(a).

The rule at issue in this appeal provides:

[6]F. Investigation report preparation (full RI) has a maximum cost of:

(3) for a full remedial investigation report submitted in response to a documented special request made by the agency after a limited site investigation report was submitted to the agency, the maximum cost for investigation report preparation (LSI only), plus [certain enumerated costs].

. . . .

G. Investigation report preparation (LSI only) has a maximum cost of $3,477.50[.]

Minn. R. 2890.1300, subp. 6.

The parties disagree over the interpretation of the phrase “the maximum cost for

investigation report preparation (LSI only)” in subpart 6F(3). “When a decision turns on

the meaning of words in a . . . regulation, a legal question is presented.” St. Otto’s Home

v. Minn. Dep’t of Human Servs., 437 N.W.2d 35, 39 (Minn. 1989). In considering

questions of law, “reviewing courts are not bound by the decision of the agency and need

not defer to agency expertise.” Id. at 39-40. “When the agency’s construction of its own

regulation is at issue, however, considerable deference is given to the agency

4

interpretation, especially when the relevant language is unclear or susceptible to different

interpretations.” Id. at 40. But this deference does not extend to situations when the

rules are “clear and capable of understanding.” Id.

We find subpart 6 to be clear and capable of understanding. Subpart 6F defines

the maximum reimbursable cost for an RI. It states that the calculation must begin with

“the maximum cost for investigation report preparation (LSI only),” which is defined in

subpart 6G as $3,477.50.1 Utilizing the maximum cost for an LSI as defined in subpart

6G, relator’s requested reimbursement for the RI did not exceed the maximum cost and

was therefore eligible for reimbursement.

Respondent argues that we must look to subpart 1 of the rule to interpret the

definition of the maximum cost for an LSI. This subpart states:

When a task listed in this part is performed during the [LSI] or [RI] step of services . . . the cost is prima facie unreasonable when it exceeds the amount specified for it in the proposal for consultant services or the maximum cost specified for it in this part . . . whichever is less.

Minn. R. 2890.1300, subp. 1. Respondent argues that this subpart “provides that the

maximum cost for a task listed in Minn. R. 2890.1300 is either the specific maximum

cost listed in subparts 2-6 or the amount proposed for that task, whichever is less.”2 We

1 The parties agree that this amount has since increased by 10%, resulting in a maximum cost of $3,825. When this figure is added to the other enumerated costs listed in subpart 6F(3), the maximum reimbursable amount for a full RI in relator’s case is $6,477.

2 Based on this interpretation, respondent assigns a figure of $2,376 to “the maximum cost for investigation report preparation (LSI only).” Using this figure, relator’s requested reimbursement ($6,251) exceeded what respondent calculated as the maximum reimbursable amount ($5,013) by $1,238.

5

disagree. Subpart 1 does not set a maximum cost for tasks nor does it state that a

reasonable amount that is reimbursed for a task becomes the maximum for that task as it

applies to other parts of the rule. Although it might be reasonable to set the maximum

cost of an RI performed after an LSI by starting with the actual cost paid for the LSI—

this is not what the rule states. The rule clearly states that the maximum cost for an RI is

the “maximum cost for investigation report preparation (LSI only)” plus other costs and

that an “[i]nvestigation report preparation (LSI only) has a maximum cost of $3,477.50.”

Minn. R. 2890.1300, subp. 6(F)(3), (G). Respondent’s argument ignores this language.

Although appellate courts defer to an agency’s reasonable interpretation of its

rules, respondent’s interpretation in this case is not reasonable. The maximum cost for

investigation report preparation (LSI only) is defined by the rules. There is nothing

ambiguous about it that would require this court to defer to the agency’s interpretation.

Because we conclude that respondent’s decision is affected by an error of law, we

reverse.

Reversed.

STATE OF MINNESOTA

IN COURT OF APPEALS

In the Matter of the Minnesota Department of Commerce Petroleum Tank Release Compensation Board Appeal of All Petro Connection, Inc.

O R D E R

#A10-1812

Considered and decided by Halbrooks, Presiding Judge; Wright, Judge; Bjorkman,

Judge.

BASED ON THE FILE, RECORD, AND PROCEEDINGS, AND BECAUSE:

1. We filed our opinion in this matter on July 5, 2011, concluding that the

applicable rules unambiguously support relator’s position and the agency’s interpretation

of those rules was not reasonable. We reversed the agency’s decision and the supreme

court has now denied further review.

2. Relator filed a timely request for costs and disbursements, to which there

was no objection. See Minn. R. Civ. App. P. 139.04 (providing that failure to serve and

file timely objections constitutes waiver).

3. Relator also filed a motion for attorney fees, relying on Minn. Stat.

§§ 15.471-.474 (2010). The statute requires an award of attorney fees and expenses when

a party prevails in a civil action, contested case, or proceeding for judicial review, if “the

position of the state was not substantially justified.” Minn. Stat. § 15.472(a), .474, subd.

3(a). If the state’s position has “a reasonable basis in law and fact, based on the totality

September 29, 2011

2

of the circumstances,” that position is “substantially justified.” Minn. Stat. § 15.471,

subd. 8.

4. Respondent Minnesota Department of Commerce argues that fees should

be denied because the agency’s position was “manifestly reasonable and had ample

justification.” In effect, the agency re-argues its position on appeal, but that position was

unequivocally rejected by this court. And the agency has not addressed the language in

this court’s opinion, concluding that the agency’s position was not reasonable.

5. Respondent has not objected to the total amount requested by relator,

argued that the claimed time or expenses are unreasonable, or identified any basis for

reducing the amount of the request. The request for attorney fees includes $550 for filing

fees, that amount was separately taxed by relator, and it may be recovered only once.

And the request for attorney fees also includes a $500 deposit in lieu of a cost bond, even

though that amount will be fully refundable to relator, against whom costs may not be

taxed. Accordingly, even in the absence of any argument of respondent supporting a

reduction of the claimed amounts, those amounts must be subtracted.

IT IS HEREBY ORDERED:

1. Relator’s motion for attorney fees and expenses pursuant to Minn. Stat.

§§ 15.471-.474 is granted.

2. Relator is awarded $6,633.17 for attorney fees, non-taxable costs, and

expenses incurred before the agency and this court.

3

3. The Clerk of the Appellate Courts shall also include taxable costs and

disbursements in the amount of $850, to which respondent waived any objection, when

entering judgment in this matter.

Dated: September 27, 2011

BY THE COURT

__/s/________________________Jill Flaskamp HalbrooksOpinion Judge

STATE OF MINNESOTAIN COURT OF APPEALS

A13-0281

GH Holdings, LLC,Petitioner,

vs.

Minnesota Department of Commerce,Respondent,

Minnesota Petroleum Tank Release Compensation Board,Respondent.

Filed December 23, 2013Rule declared invalid

Schellhas, Judge

Commissioner of Commerce

Daniel W. Voss, The Law Offices of Daniel W. Voss, PLLC, Minneapolis, Minnesota (for petitioner)

Lori Swanson, Attorney General, Michael J. Tostengard, Assistant Attorney General, St. Paul, Minnesota (for respondents)

Considered and decided by Schellhas, Presiding Judge; Stauber, Judge; and

Bjorkman, Judge.

S Y L L A B U S

When the Minnesota Petroleum Tank Release Compensation Board adopted Minn.

R. 2890.4600, subp. 2(A) (2013), it exceeded its statutory authority by purporting to limit

the evidence in a contested case to the written record submitted to the Minnesota

Petroleum Tank Release Compensation Board. The limitation of evidence in Minn. R.

2890.4600, subp. 2(A), is therefore declared to be invalid.

2

O P I N I O N

SCHELLHAS, Judge

Invoking this court’s original jurisdiction under Minn. Stat. §§ 14.44–.45 (2012),

petitioner challenges the validity of Minn. R. 2890.4600, subp. 2(A), which purports to

limit the evidence in a contested case to the evidence previously submitted to respondent

board. Petitioner argues that rule 2890.4600, subpart 2(A), exceeds respondent-board’s

statutory authority and violates petitioner’s right to due process. Because we conclude

that respondent-board exceeded its statutory authority in adopting the rule, we declare the

rule to be invalid. We therefore do not address petitioner’s constitutional argument.

FACTS

Petitioner GH Holdings LLC (GH) claims that, when excavating property for

redevelopment in Rochester, it discovered releases from two underground gasoline

storage tanks that date back to the early 1900s. GH’s environmental consultant surveyed

the releases, determined the extent of the contamination, and oversaw GH’s voluntary

cleanup of the site. GH sought reimbursement from respondent Minnesota Petroleum

Tank Release Compensation Board (the board) for GH’s response costs, including

excavation; treatment; and disposal costs of 1,872 cubic yards of contaminated soil. The

board denied GH’s application in its entirety on the grounds that the Minnesota Pollution

Control Agency (MPCA) did not order any corrective action and therefore GH’s costs

were not corrective-action costs. GH appealed the denial as a contested case. An

administrative law judge (ALJ) scheduled a hearing.

3

Consistent with Minn. R. 2890.4600, subp. 2(A), the board argued that the

evidence the ALJ can consider is limited to the written record previously submitted to the

board. GH petitioned this court for a declaratory judgment to determine the validity of

Minn. R. 2890.4600, subp. 2(A). The ALJ stayed the contested-case proceeding, pending

a decision by this court on the petition for declaratory judgment. A special-term panel of

this court ruled that GH could proceed with its petition for declaratory judgment.

ISSUE

Is the challenged portion of Minn. R. 2890.4600, subp. 2(A), invalid because the

board exceeded its statutory authority when it adopted the rule, purporting to limit

evidence in a contested case to the written record previously submitted to the board?

ANALYSIS

The Petroleum Tank Release Cleanup Act is embodied in Minnesota Statutes

sections 115C.01–.13 (2012). “[T]he Act governs liability and procedures for releases of

petroleum into the environment and establishes a fund for reimbursement of cleanup

costs for such spills.” In re Crown CoCo, Inc., 458 N.W.2d 132, 135 (Minn. App. 1990),

review dismissed (Minn. Sept. 14, 1990). The act created the board, which is responsible

for administering the act. Minn. Stat. § 115C.07. The board will “generally refund up to

90 percent and in certain cases more than 90 percent of corrective action costs incurred in

remediating a petroleum spill.” Moorhead Econ. Dev. Auth. v. Anda, 789 N.W.2d 860,

870 (Minn. 2010). Reimbursement determinations may address (1) whether the person

seeking reimbursement is an “eligible applicant,” (2) what costs “were actually incurred

4

and were reasonable,” and (3) whether the costs were “corrective.” Minn. Stat.

§ 115C.09.

When the board adopted procedural rules for both reimbursement determinations

and contested-case appeals, it purported to exercise its rulemaking power under Minn.

Stat. § 115C.07, subd. 3. The rules require that a reimbursement applicant submit a

written application to the board. Minn. R. 2890.4400, subp. 1 (2013). The commissioner

of the MPCA reviews the application and submits a report to the board. Id., subp. 6

(2013) (requiring the commissioner to submit a report); see generally Minn. R.

2890.0015, subp. 18 (2013) (defining “Commissioner”). The board’s staff then makes a

determination of eligibility for reimbursement. Minn. R. 2890.4500, subp. 2 (2013). An

applicant may appeal that determination to the board. Id., subp. 3 (2013). In this case, GH

appealed the determination of the board’s staff.

When the board considers an appeal of a reimbursement determination, the board must determine the amount of the reimbursement based on those costs it finds are eligible, actually incurred, and reasonable. The determination must be made on the basis of the written record. The board may also allow supplemental information explaining the application to be presented orally. The board may establish a fair and reasonable limit on time allowed for oral presentation.

Id. (emphasis added).

“An applicant for reimbursement may appeal a reimbursement determination of

the board as a contested case under chapter 14.” Minn. Stat. § 115C.12, subd. 2(a). “On

appeal, the Office of Administrative Hearings must determine whether the evidence

submitted to the board entitles the applicant to reimbursement and whether the board’s

5

determination is otherwise consistent with or contrary to law.” Minn. R. 2890.4600, subp.

2(A) (emphasis added). The final decision in a contested case is made by the

commissioner of commerce. Minn. Stat. § 115C.12, subd. 3.

GH argues that rule 2890.4600, subpart 2, is invalid because the board exceeded

its statutory authority by purporting to limit the evidence that may be presented in

contested case appeals of board decisions. “The validity of any rule may be determined

upon the petition for a declaratory judgment thereon, addressed to the Court of Appeals,

when it appears that the rule . . . interferes with or impairs . . . the legal rights or

privileges of the petitioner.” Minn. Stat. § 14.44. This court “shall declare the rule

invalid” if the rule (1) “violates constitutional provisions,” (2) “exceeds the statutory

authority of the agency,” or (3) “was adopted without compliance with statutory

rulemaking procedures.” Minn. Stat. § 14.45. The board relies on Geo. A. Hormel & Co.

v. Asper, 428 N.W.2d 47, 50 (Minn. 1988), in which the supreme court stated that the

“agency’s interpretation of the statutes it administers is entitled to deference and should

be upheld, absent a finding that it is in conflict with the express purpose of the act and the

intention of the legislature.” But an agency’s “suggestion of deference is . . . misplaced”

when appellate courts “are confronted with the threshold question of whether the

legislature has granted an agency the authority to take the action at issue.” In re Hubbard,

778 N.W.2d 313, 318 n.4 (Minn. 2010).

Appellate courts “apply the de novo standard of review to the question of whether

the [agency] has exceeded its statutory authority” and “resolve any doubt about the

6

existence of an agency’s authority against the exercise of such authority.” In re Minn.

Power, 838 N.W.2d 747, 753 (Minn. 2013) (quotation omitted).

Because an agency is a creature of statute, it “has only those powers given to it by

the legislature.” In re Qwest’s Wholesale Serv. Quality Standards, 702 N.W.2d 246, 259

(Minn. 2005) (quotation omitted). Although we need not give statutory authority “a

cramped reading, any enlargement of express powers by implication must be fairly drawn

and fairly evident from the agency objectives and powers expressly given by the

legislature. Neither an agency nor the courts may enlarge the agency’s powers beyond

[those that were] contemplated by the legislative body.” Id. (quotation omitted).

Rules adopted by the chief administrative law judge that “govern . . . the

procedural conduct of . . . contested case hearings . . . shall be binding upon all agencies

and shall supersede any other agency procedural rules with which they may be in

conflict.” Minn. Stat. § 14.51 (2012). “[A]dministrative agencies have the authority to fill

in gaps in the framework of regulatory statutes.” St. Paul Cos. v. Hatch, 449 N.W.2d 130,

134 n.3 (Minn. 1989) (noting Minnesota adopted the federal approach on this issue).

Although “administrative agencies may adopt regulations to implement or make specific

the language of a statute, they cannot adopt a conflicting rule.” Billion v. Comm’r of

Revenue, 827 N.W.2d 773, 781 (Minn. 2013) (quotation omitted).

In this case, Minnesota Statutes section 115C.07, subdivision 3(a), requires the

board to “adopt rules regarding its practices and procedures, the form and procedure for

applications for compensation from the fund, procedures for investigation of claims and

specifying the costs that are eligible for reimbursement from the fund.” Section 115C.12,

7

subdivision 2(a), specifically provides that “[a]n applicant for reimbursement may appeal

a reimbursement determination of the board as a contested case under chapter 14.”

(Emphasis added.) Chapter 14 embodies the Minnesota Administrative Procedure Act

(MAPA). Minn. Stat. §§ 14.001–.69 (2012).

Under Minn. Stat. § 14.58, “[i]n any contested case all parties shall be afforded an

opportunity for hearing after reasonable notice.” “In contested cases agencies may admit

and give probative effect to evidence which possesses probative value commonly

accepted by reasonable prudent persons in the conduct of their affairs.” Minn. Stat.

§ 14.60, subd. 1. “Every party or agency shall have the right of cross-examination of

witnesses who testify, and shall have the right to submit rebuttal evidence.” Id., subd. 3.

Under Minn. R. 1400.7200 (2013), “[a]ny party may be a witness and may present

witnesses on the party’s behalf at the hearing.” “Required procedures in a contested case

proceeding include the right to be heard after reasonable notice, the production of

witnesses and documents, the taking of evidence, examination and cross-examination of

witnesses, representation by counsel, presentation of arguments, and decision upon the

record.” Hennepin Cnty. Cmty. Servs. Dep’t v. Hale, 470 N.W.2d 159, 165 (Minn. App.

1991), review denied (Minn. July 24, 1991). “These required procedures are the incidents

of a trial.” Id.

The board argues that it did not exceed its statutory authority, relying on Minn.

Stat. § 115C.07, subd. 3(a), which authorizes the board to adopt rules regarding its own

practices and procedures, and Minn. Stat. § 115C.07, subd. 3(c), which authorizes the

board to “adopt other rules necessary to implement this chapter.” But the board cites no

8

authority for the proposition that it has authority to adopt rules that govern the practices

and procedures applicable to contested cases under MAPA, and we are aware of none.

Limiting evidence in a contested case is not necessary to implement chapter 115C.

The board also argues that it did not exceed its statutory authority by adopting

Minn. R. 2890.4600, subp. 2(A), because “[t]he board may also allow supplemental

information explaining the application to be presented orally” during board review, Minn.

R. 2890.4500, subp. 3 (emphasis added). The board’s argument is not persuasive. First,

the issue in this appeal is whether the challenged portion of Minn. R. 2890.4600, subp.

2(A), is invalid because the board exceeded its statutory authority when it adopted the

rule, purporting to limit evidence in a contested case to the written record previously

submitted to the board. Second, any allowance of supplemental information under Minn.

R. 2890.4500, subp. 3, is entirely at the board’s discretion and does not include the

presentation of witness testimony.

The board also argues that rule 2890.4600, subpart 2(A), does not conflict with

contested-case procedures because it merely limits the substantive scope of contested-

case proceedings, leaving the various procedural tools untouched. We disagree. For

reasons already discussed, rule 2890.4600, subpart 2(A), directly conflicts with

provisions of chapter 115C and MAPA. The board therefore exceeded its statutory

authority by adopting the rule, and we declare the rule to be invalid.

Because rule 2890.4600, subpart 2(A), limits an ALJ’s consideration in a

contested case to “the evidence submitted to the board,” we conclude that the rule

conflicts with Minn. Stat. §§ 14.58 and .60; Minn. Stat. § 115C.12, subd. 2(a); and Minn.

9

R. 1400.7200. We further conclude that the board exceeded its statutory authority under

Minn. Stat. § 115C.07, subds. 3(a) and (c), when it adopted Minn. R. 2890.4600, subp. 2,

and that the rule is therefore invalid. Because we resolve this case on statutory grounds,

we do not address GH’s due-process claim. See Pietsch v. Minn. Bd. of Chiropractic

Examiners, 683 N.W.2d 303, 309 n.8 (Minn. 2004) (declining to decide constitutional

issues presented when the case could be resolved on non-constitutional grounds).

D E C I S I O N

The board exceeded its statutory authority when it adopted Minn. R. 2890.4600,

subp. 2(A), because the rule limits the evidence allowed in a contested case and therefore

conflicts with Minn. Stat. §§ 14.58 and .60; Minn. Stat. § 115C.12, subd. 2(a); and Minn.

R. 1400.7200. The following language in Minn. R. 2890.4600, subpart 2(A), therefore is

invalid: “On appeal, the Office of Administrative Hearings must determine whether the

evidence submitted to the board entitles the applicant to reimbursement and whether the

board’s determination is otherwise consistent with or contrary to law.”

Rule declared invalid.

m S?ilHif,?'*,

Application for Registration with the Petrofund Board as a Consultant

Under Minnesota Statutes Chapter 115C,11, all consultants who perform corrective action services in

response to a petroleum tank release must register with the Petrofund Board. "Consultant" means anindividual, partnership, association, private corporation, or any other legal entity that actually performsconsulting services, which include the rendering of professional opinion, advice, or analysis regarding a

release. As part of complying with the required registration criteria, consultants must complete thisform and submit it together with the indicated documentation.

Registration is effective 30 days after a complete application is received by the Board and remains inforce until any one of the following occurs:o the applicant's professional liability coveraBe, which must include pollution impairment liability

coverage, expires;o the applicant voluntarily terminates their registration; oro the applicant's registration is suspended or revoked by the Commissioner of Commerce or the

Petrofund Board.

1. APPLICANT I N FORMATION

Full name of legal entity applying for ration:

Doing Business As (DBA):

Address abCity state t////Phone

Primary Con

legal Entity (check one)

n Sole Proprietorship

n General Partnership

f, Corporation

n Other legal entity

*lf you are a legal entity that is required to be registered with the Office of the Minnesota Secretary ofState, your registration with their agency must be current in order to file or renew your Petrofundregistration.

tr Limited Liability Partnership

I Limited Partnership

tr Limited Liability company

Page 1

Background Questions

L, Has the legal entity, or any owner, partner, officer, director or manager of the legal entity, ever beenconvicted, whether by pleading guilty, with or without admitting guilt, or pleading nolo contendere,of any of the following offenses: any felony; any gross misdemeanor; or a misdemeanor involving:(a) assault; (b) harassment; (c) moralturpitude; or (d) conduct similarto items (a)to (c)?

M ves. Please provide a detailed description of the offense(s). Tryx €ucts,)n Ai tL,*1 ,,r/itl J^,^,tr No. 6a* tl4is"{a.u.+u*h /{r*,,*,*t **yg:.:?U r4X 'r rrzu*r c*fi

c)t\21

2. Has the legal entity, or any owner, partner, officer, director or manager of the{egal entity, ever beensubject of an order revoking, suspending, restricting, limiting, or imposing other disciplinary actionagainst the legal entity's license or certification in another state or jurisdiction?

! Yes. Please provide a detailed description of the order(s).

tr No.

2. BRANCH OFFICES

Please provide the following information for any branch offices that perform work at cleanup sites inMinnesota. Attach additional sheets if necessary.

Branch Office #1

Address

City State_ Zip

Email

County.

Phone

Primary contact.

Branch Office #2

Address

City. State_ Zip

Email

County.

Phone

Primary contact

Branch Office #3

Address

City. State_ Zip County.

Phone Email

Primary contact

Page 2

3. CERTIFICATION

As legally certified with the authorized signature below, the legal entity identified in Part I above makesthis application for registration with the Petrofund Board as a consultant and:

o certifies knowledge of and agrees to abide by the requirements of Minnesota Statute Chapter115C and Minnesota Rule 2890;

. agrees to retain and make available for inspection all corrective action records for seven years;

. agrees to maintain professional liability coverage, including pollution impairment liability, andagrees to submit a certificate or certificates verifying the existence of the required insurancecoverage*; and

. agrees to file a corrected application for registration within 30 davs if any of the information inthis application becomes inaccurate or incomplete in any material respect.

*Please note that the company name listed as the "lnsured" on the Certificate of lnsurance must be identical tothe company name listed on this registration application. The "Certificate Holder" section of the Certificate oflnsurance must indicate: State of Minnesota, Department of Commerce/Petrofund, 85 - 7th Place East, Suite280, St. Paul, MN 55101-2198.

NOTARIZATION

Subscribed and sworn to before me this '28 day ofAuthorized signature

Name(print) /btll Gbstt" Pfr-s;{l'a't,"*,,u "0 / f a6f zozt Commission Expiration Date o\-3,\ - )r:t\

-.f:ti:.. AISHA A ABDIi-li*i NoIARYPUBLtc-MTNNESoTA="L,:"lJ My coMr,trssloN ExPIRES0l 31r20

4. FORM SUBMITTAL INSTRUCTIONS

Submit (mail, fax or email) the following documents:

o this completed form that has been signed, dated and notarized; and

o the certificate(s) verifying the existence of the required insurance coverage.

Please note that origina! signatures are no !onger required.

MAILING ADDRESS:

Minnesota Department of Commerce - Petrofund85 Seventh Place East, Suite 280St Paul, MN 55101-2198EMATL ADDRESS: petrofund. commerce@ state. m n. us

FOR OFFICE USE ONLY Petrofund Consultant Registration Number

Pagc 3

ACO.r.if. GERTIFICATE OF LIABILITY INSURANCEDATE (MM/DD/YYYY)

6/|/2020THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTTTUTE A CONTRACT BETWEEN THE |SSU|NG TNSURER(S), AUTHORTZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: lf the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.lf SUBROGATION lS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

PRODUCER

G&L InsuranceGroup

3224 6th Ave NE

Rochester MN 55906

NAME: I aDatlla rlollulld

F.*.obo,[r,(rrli,r*..u,,,INSURER(S) AFFORDING COVERAGE NAIC #

INSURER A: EVANSTON INS CO 3 5378

INSURED

Onrni Environmental Inc

2IO I5TH STNE

ROCHESTER MN 55906-7026

INSURER B :

INSURER C :

INSURER D :

INSURER E I

INSURER F

CERTIFICATE NUMBER:THE POLICIES OF INSURANCE LISTED BELOW

INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSUMNCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

COMMERCIAL GENERAL LIABILITY

.LA,M.-MADE l7lo..r*PRO}-ES SI ONAL LIA BI LITY

GEN'L AGGREGATE LIMIT APPLIES PER:

::::I E'# l-r'o"

MKLV3ENVIOI880

AUTOMOBILE LIABILITY

ANY AUTO

OWNED T'-"]SCHEDULEDAUTOS ONLY I IAUTOSHIRED F rlorl-owrueoAUTOS ONLY I I AUTOS ONLY

BODILY INJURY (Per accident)

OCCUR

CLAIMS.MADE

EMPLOYERS' LIABILITY

E,L. DISEASE - EA EMPLOYEE

E.L. DISEASE. POLICY LIMIT

MKLV3ENVIOI S8O

1.000,000

1,000,000

DESCRIPTION OF OPERATIONS / LOCATIONS i VEHICLES (ACORD 1 01, Additlonal Remarks Schedule, may be attached if more space is required)

See ACORD l0l

Omni Environmental Inc

2IO I5fi StNE

Rochcstcr MN 55906

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED INACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE

..Jrrw.e.1 1- l+tc.1

@ 1988-2015 ACORD CORPORATION. All rights reserved,

The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03)

AGENCY CUSTOMER ID:

LOC #:

ADDITIONAL REMARKS SCHEDU LE Page 1 of 1

AGENCY

G&L lnsuranceGroup

NAMED INSURED

Omni Environmental lncPOLICY NUMBER

CARRIER NAIC CODE

EFFECTIVE DATE:

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM,

FORM NUMBER: 25 FORM TITLE: Certificate Of Liability lnsurance

Policy includes: Blanket Additional lnsured - Primary & Non-Contributory - Owners, Lessees or Contractors / Additional lnsured - Owners, Lessees orContractors - Completed Operations when required by written contract signed by both parties and executed prior to commencement of operations ** FORINFORMATIONAL PURPOSES ONLY, NOT FOR DISTRIBUTION *. Please contact G&L with the Certholder Name and Mailing Address for additionalcertificates.

ACORD 101 (2008/01) @ 2008 ACORD CORPORATION. All rights reserved.

The ACORD name and logo are registered marks of ACORD

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m 8?ilIi[:'*,

Application for Registration with the Petrofund Board as a Contractor

Under Minnesota Statutes Chapter 115C.11, all contractors who perform corrective action services in

response to a petroleum tank release must register with the Petrofund Board. "Contractor" means an

individual, partnership, association, private corporation, or any other legal entity that actually performs

contractor services, which are services within a scope of work that can be defined by typical writtenplans and specifications, such as excavation, treatment of contaminated soil and groundwater, drilling,

laboratory analysis, professional surveying, electrical work, plumbing, and carpentry. As part ofcomplying with the required registration criteria, contractors must complete this form and submit it

together with the indicated documentation.

Registration is effective 30 days after a complete application is received by the board and expires

everv two vears on the anniversarv date of the most recent registration. Prior to its bi-annual

expiration, a registration remains in force until voluntarily terminated by the registrant or until

suspended or revoked by the Commissioner of Commerce or the Petrofund Board. lf you have

questions, please contact the Petrofund !nformation Line at 651-539-1515 or 800'638-0418.

1. APPLICANT I N FORMATION

Full name of legal entity applying for registration:

Doing Business As (DB

stated{A) zip {c;?'b

Primary contact,

Legal Entity (check one)

tr Sole Proprietorship

n General Partnership

E Corporation

n other legal entity

*lf you are a legal entity that is required to be registered with the Office of the Minnesota Secretary of

State, your registration with their agency must be current in order to file or renew your Petrofund

registration.

tr Limited Liability Partnership

tr Limited Partnership

tr Limited Liability company

Page I

1.

Background Questions

Has the legal entity, or any owner, partner, officer, director or manager of the legal entity, ever beenconvicted, whether by pleading guilty, with or without admitting guilt, or pleading nolo contendere,of any of the following offenses: any felony; any gross misdemean or; or a misdemeanor involving:(a) assault; (b) harassment; (c) moral turpitude; or (d) conduct similar to items (a) to (c)?

ffi Ves, Please provide a detailed description of the offense(s), including documentation, 74X l.odl,,r.r, .y'i

tr No. &.rr.l,, ,1.(n7{p4^4r,,tt.^,. ifq1,..7-9.,r-^.:;l' ft lJ,r,.!,,rt,,1"r.1 .,1r,",,,r 'it (', ( ,i; "..... ",!,,, ( ri,\, l, r I ril,trvr s ] lly

Hasthe legal entity, oranyowner, partner, officer, directoiormanalerof the legalentity, everrdeen I?-y,:i.,,,subject of an order revol<ing, suspending, restricting, limiting, or imposing other disciplinary action ' ,<,tii''

against the legal entity's license or certification in another state or jurisdiction?

Yes. Please provide a detailed description of the order(s), including documentation.No.

2. BRANCH OFFICES

Please provide the following information for any branch offices that perform work at cleanup sites inMinnesota, Attach additional sheets if necessary.

Address

City State County

Phone Email

Primary contact

2.

trtr

zip

Branch Office #2

Address

City State zip

Email

County

Phone

Primary contact.

Branch Office #3

Add ress

City. State

Phone Email

Primary contact

zip County.

Page 2

3. CERTIFICATION

As legally certified with the authorized signature below, the legal entity identified in Part I above makesthis application for registration with the Petrofund Board as a contractor and:

o certifies knowledge of and agrees to abide by the requirements of Minnesota Statute Chapter115C and Minnesota Rule 2890;

. agrees to retain and make available for inspection all corrective action records for seven years;

and. agrees to file a corrected application for registration within 30 davs if any of the information in

this application becomes inaccurate or incomplete in any material respect.

NOTARIZATION

Subscribed and sworn to before me this_day of

Commission Expiration n"1" a\ '-'}'' - 2-.L -)-'\

zed signature

_.,$3, ATSHAAABDT'r:ttii; ,i NoIARY PUBLIC - MINNESoIA'".,-".-" My CoMM|SS|oN EXP|RES 0l/31/20

4. FORM SUBMITTAL INSTRUCTIONS

Submit this completed form that has been signed, dated and notarized. Please note thatoriginal signatures are no longer required.

Mattrue ADDRESS:

Minnesota Department of Commerce - Petrofund85 Seventh Place East, Suite 280St Paul, MN 55101-2198Eunt ADDREss: petrof u n d. com merce @ state. m n. us

FOR OFFICE USE ONLY: Petrofund Contractor Registration Number.

Page 3

--,qior.if GERTIFICATE OF LIABILITY INSURANCEDATE (MM/DD/YYYY)

611112070

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THISCERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIESBELOW, THIS CERTIFICATE OF INSURANCE DOES NoT CONSTTTUTE A CONTRACT BETWEEN THE |SSU|NG TNSURER(S), AUTHoRTZEDREPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER,IMPORTANT: lf the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.lf SUBROGATION lS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement, A statement onthis certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

PRODUGER

G&L InsuranceGroup

3224 6th Ave NE

Rochester MN 55906

NAME: labxthx Hollurld

iddl'r'o. e,o, 507-280-8300 lifie, ruor,

Eii'riHEss, tabatha(@glinsgroup.com

INSURER(S) AFFORDING COVERAGE NAIC #

INsURER A: EVANSTON INS CO 3 5378

INSI,JRED

Onrni Environmental Inc

2IO I5TH STNF,

ROCHESTER MN 55906.7026

INSURER B :

INSURER C I

INSURER D :

INSURER E:

INSURER F

COVERAGES CERTIFICA'TE NUMBER: REVISIONTHIS IS TO CERTIFY THAT THE POLICIES OF INSUMNCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIODINDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUIVENT WITH RESPECT TO WHICH THISCERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

LTR TYPE OF INSURANCE NSD Uv\/D POLICY NUMBER LIMITS

x I coMMERCTAL GENERAL LtABtL|TY

I lcr-nrr'rs-vnoe | ;loccunlEona,ssloNaLUe-lesnrry

MKLV3ENVIO ISSO 0610312020 0610312021

EACH OCCURRENCE $ 1,000,000

PREMISES (Ea occurence) s 50,000

x MED EXP (Any one person) $ 5,000

PERSONAL & ADV INJURY E 1,000,000

GENI'L AGGREGATE LIMIT APPLIES PER:

I'or,.' fllgoi I,ocI orr=*,

GENERAL AGGREGATE ,000,000

x PRODUCTS - COIVP/OP AGG 9 1,000,000

PROFESSIONAL $ l,ooo,oooAUT OMOBILE LIABILITY

ANY AUTO

OWNEDAUTOS ONLYHIREDAUTOS ONLY

SCHEDULEDAUTOSNON-OWNEDAUTOS ONLY

;UMBINTU SINULI LIMI I

=a accident) $

BODILY INJURY (Per person) $

BODILY INJURY (Per accident) $

PKUPTR I Y UAMAGE(Per accidenl) $

$

UMBRELLA LIAB

EXCESS LIAB

OCCUR

CLAIMS-MADE

EACH OCCURRENCE $

AGGREGATE $

DED I IRETENTION$ $

EMPLOYERS'LtABtLtTY Y' NPROPRIETOR/PARTNERYEXECUTIVECER,/I\,,1 E MBE R EXCLU D E D?datory in NH),, describe underIRIPTION OF OPERATIONS below

N/A

rtrxSTATUTE ER

E,L, EACH ACCIDENT $

E,L, DISEASE - EA EIVPLOYEE $

E,L, DISEASE - POLICY LIIVlIT $

POLLUTION L]ABIL]TY MKLV3ENVIOlsSO 0610312020 0610312021

AGGREGATE

EA CONDITION

1 ,000,000

l ,000,000

DESCRIPTIONOFOPERATIONS/LOCATIONS/VEHICLES (ACORDl0l,AdditionalRemarksSchedule,maybeattachedifmorespaceisrequired)

See ACORD 101

Omni Environrnental Irrc

210 15rh StNE

Rochcstcr MN 55906

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORETHE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN

ACCORDANCE WITH THE POLICY PROVISIONS.

AUTHORIZED REPRESENTATIVE

./.{r!f! | Lraifl

@ 1988-2015 ACORD CORPORATION. All rights reserved.The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03)

--l 6ACORD-l-.-

AGENCY CUSTOMER ID:

LOC #:

ADDITIONAL REMARKS SCHEDU LE Page '1 of 1

AGENCY

G&L lnsuranceGroup

NAMED INSURED

Omni Environmental lncPOLICY NUMBER

CARRIER NAIC CODE

EFFECTIVE DATE:

ADDITIONAL REMARKS

THIS ADDITIONAL REMARKS FORM IS A SCHEDULE TO ACORD FORM,

FORM NUMBER: 25 FORM TITLE: Certificate Of Liability lnsurance

Policy includes: Blanket Additional lnsured - Primary & Non-Contributory - Owners, Lessees or Contractors / Additional lnsured - Owners, Lessees orContractors - Completed Operations when required by written contract signed by both parties and executed prior to commencement of operations ** FORINFORMATIONAL PURPOSES ONLY, NOT FOR DISTRIBUTION * Please contact G&L with the Certholder Name and Mailing Address for additionalcertificates.

ACORD 101 (2008/0{) @ 2008 ACORD CORPORATION. All rights reserved.

The ACORD name and logo are registered marks of AGORD

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UNITED STATES DISTRICT COURTDISTRICT OF MINNESOTA

------------------------------------------------------------) COURT FILE

UNITED STATES of AMERICA ) NO. 14-CR-47 (ADM/FLN))

vs. )) Courtroom 13 West

MATTHEW NICHOLAS GIKAS ) Wednesday, May 28, 2014) Minneapolis, Minnesota

------------------------------------------------------------

C H A N G E O F P L E A

BEFORE THE HONORABLE ANN D. MONTGOMERYUNITED STATES DISTRICT JUDGE

A P P E A R A N C E S:

For the Government: OFFICE OF THE U.S. ATTORNEYBy: STEVEN L. SCHLEICHER

Assistant U.S. Attorney600 United States Courthouse300 South Fourth StreetMinneapolis, Minnesota 55415

For the Defendant: DURHAM LAW OFFICEBy: CAROLINE DURHAM, ESQUIRE413 Wacouta Street - Suite 430St. Paul, Minnesota 55101

Court Reporter: TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCPOfficial Court Reporter - U.S.D.C.1005 United States Courthouse300 South Fourth StreetMinneapolis, Minnesota 55415612.664.5108

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 1 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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(3:00 p.m.)

P R O C E E D I N G S

IN OPEN COURT

(Defendant present)

THE COURT: Good afternoon. Please be seated.

THE CLERK: The Court calls the case of United

States of America versus Matthew Nicholas Gikas, Criminal

Case Number 14-47.

Would counsel note their appearances, please.

MR. SCHLEICHER: Good afternoon, Your Honor.

Steve Schleicher, Assistant United States Attorney,

appearing on behalf of the United States of America.

THE COURT: Good afternoon, Mr. Schleicher.

Ms. Durham?

MS. DURHAM: Good afternoon, Your Honor. Caroline

Durham representing Matt Gikas, Matthew Gikas, who is here

and present for a change of plea.

THE COURT: And good afternoon, Mr. Gikas.

THE DEFENDANT: Hello.

THE COURT: It's my understanding that the reason

for today's court appearance is that you have made a

decision to plead guilty rather than to have a trial of your

case, is that accurate?

THE DEFENDANT: Yeah.

THE COURT: All right. If you would come to the

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 2 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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lectern, please, with your counsel, Ms. Durham.

Let's see. Mr. Schleicher, we've had a couple

versions of a pretrial agreement go through. Is there a

current one that's been signed?

MR. SCHLEICHER: There is, Your Honor. If I may

approach at this time, I can file the executed plea

agreement with the clerk.

THE COURT: All right.

(Document handed to the Court)

THE COURT: Can you tell me what the changes are

from the one I reviewed?

MR. SCHLEICHER: Your Honor, two changes.

First, Ms. Durham found that I had paragraph 17

listed twice, and so the prior version from the first

paragraph 17 had 22 total paragraphs. This one has 23.

That's the nonsubstantive change.

The other change is in the appeal waiver. The

version that you reviewed indicated that the appeal waiver

was triggered at 16 months imprisonment. The new version

reflects that it is in fact the maximum of the nondeparture

range of the sentencing guidelines, whatever you determine

those guidelines to be.

THE COURT: All right. And you probably didn't

want to hear this, but I also noted another typo, at least

it seemed to me. It indicates in paragraph 6 that the

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 3 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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defendant is going to plead guilty to Count 3, yet paragraph

11 gives the baseline offense level for Count 1.

MR. SCHLEICHER: I'm sorry. Could you say that

again?

THE COURT: I'm assuming that paragraph 6 is

correct and he's pleading to Count 3.

MS. DURHAM: You're correct, Your Honor.

MR. SCHLEICHER: You're right, Your Honor.

Paragraph 11, it's the correct base offense level, but it

should say guideline section for Count 3, and if we could

pen that change in --

THE COURT: Okay. I've changed it to 3 on the

original here and I'll pass it back to you and you can

initial the change.

MR. SCHLEICHER: Thank you, Your Honor.

(Document revised and initialed by Mr. Schleicher,

Ms. Durham, and the defendant)

MR. SCHLEICHER: I've placed my initials

signifying noting the change.

MS. DURHAM: And for the record, I have as well

put my initials, as has Mr. Gikas.

THE COURT: Gertie, I'm going to give you these

old ones to recycle so we don't get confused.

All right. Mr. Schleicher, does the

revised-twice-and-now-amended plea agreement bear your

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 4 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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signature?

MR. SCHLEICHER: Yes, it does, Your Honor.

THE COURT: And yours as well, Ms. Durham?

MS. DURHAM: Yes, Your Honor.

THE COURT: And Mr. -- is it Gikas or Gikas?

THE DEFENDANT: Gikas.

THE COURT: Gikas. Does this bear your signature

as well?

THE DEFENDANT: Yes, it does, Your Honor.

THE COURT: At this point, Mr. Gikas, if you wish

to proceed with your plea, I'm going to ask that you raise

your right hand.

MATTHEW NICHOLAS GIKAS, DEFENDANT, SWORN

THE DEFENDANT: I do.

THE COURT: I'm now going to have you have a spot

up on the witness stand with Ms. Durham beside you and a

copy of the plea agreement, hopefully.

Mr. Schleicher, you may temporarily have a seat

and I'll get back to your assistance in a few minutes.

MR. SCHLEICHER: Yes, Your Honor.

E X A M I N A T I O N

BY THE COURT:

Q. Mr. Gikas, as I'm sure Ms. Durham has forewarned you,

I'm going to ask you lots of questions this afternoon.

A. Yeah.

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 5 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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Q. Some of these questions are designed to make sure that

you know the constitutional rights that you're giving up,

some of -- a whole set of them relates to your understanding

of the plea agreement, and then there's a set that relates

to the crime itself, what's called the factual basis. I'm

going to ask Mr. Schleicher to ask those questions for me

about the factual basis, but we'll cover the constitutional

rights and the plea agreement first, okay?

A. Okay.

Q. This is a formal procedure, obviously, but if at any

point you'd like to ask me something, or you want me to slow

down or stop, or if you need a timeout to talk to your

counsel, will you let me know?

A. Yes, I will.

Q. It's most important that we have a meeting of the minds

today, because after today I'm not going to let you change

your mind about pleading guilty. That door closes on going

to trial or not, but up to that point, my accepting the

guilty plea, which I do at the end of the procedure today,

you could change your mind at any time.

Do you understand that?

A. Yeah.

Q. Okay. Let's talk first about your constitutional rights

and I want to learn a little bit about your background.

What is your age, sir?

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 6 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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A. 51.

Q. Your educational background?

A. I went to Catholic high school and graduated from North

Carolina State University in 1987.

Q. Grew up in North Carolina or here?

A. Rochester.

Q. Okay. How did you end up in North Carolina?

A. Just wanted to get out of Minnesota, had some relatives

down there.

Q. I have a daughter that escaped from here to Duke in

North Carolina, but she did not go to North Carolina State.

Let's see. Some of the questions like the next

one seem to be obvious, but I have to ask you anyway.

Obviously you speak English, correct?

A. Correct.

Q. Are you satisfied with your representation by

Ms. Durham?

A. Yes, yes.

Q. She's answered all your questions?

A. Yeah.

Q. Have you consumed any drugs or alcohol in the last 24

hours?

A. No.

Q. Your mind free and clear today?

A. Yeah.

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 7 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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Q. Okay. Obviously you're nervous and there's places you'd

rather be clearly than here, but I want to make sure that

there isn't anything about today that makes it a worse day

than any other day to come and plead guilty.

A. No.

Q. And that may seem strange, but sometimes I've found out

the defendant got some terrible news in the morning or had a

terrible toothache or something that is extraneous to these

proceedings. Is there anything particularly about today

that makes it worse than tomorrow to plead guilty?

A. No.

Q. Okay. Are you under the care of any physician or

psychiatrist for any ongoing course of treatment?

A. No.

Q. Are you taking any medications currently?

A. Yes, just --

Q. And those would be?

A. Lipitor, Lisinopril, and Norvasc.

Q. Some of those sound like heart medications?

A. They're all heart meds.

Q. Blood pressure --

A. Blood pressure, cholesterol, and heart spasms.

Q. Have you been on those meds for some period of time?

A. Eleven, 12 years.

Q. Okay. And I'm asking that because I want to make sure

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 8 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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there isn't anything about those drugs that's affecting you

today. I take it you're stable on those medications and

they are -- sometimes when you start a new med you get woozy

or unstable. Nothing like that?

A. No.

Q. Okay. Is there anything else that's interfering with

your ability to think clearly about this process?

A. No.

Q. Do you know that if you chose to, you could have a jury

trial? We would impanel a group of 12 jurors who would be

seated in the jury box. That jury would have to find

unanimously, they'd all have to agree, that you were guilty

beyond a reasonable doubt. That's the high standard that

has to be met in a criminal case.

Do you know you're giving up those rights to a

jury trial, unanimous verdict, and proof beyond a reasonable

doubt?

A. Yes.

Q. There's a statute that actually sets the time within

which a case must begin. That's called the Speedy Trial

Act. Your case could be tried within the next few weeks and

clearly within the time limits set by the Speedy Trial Act.

Do you know you're giving up the right to a speedy

trial?

A. Yes.

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 9 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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Q. If you went forward to trial, you'd be entitled to the

assistance of counsel. Ms. Durham would be with you at all

stages of the trial. She'd have the right to confront and

cross-examine any of the witnesses who might testify against

you and you'd have the benefit of her assistance throughout

the trial.

Do you know that?

A. Yeah.

Q. Another constitutional right that you have is the

presumption of innocence, and that has a couple

ramifications to trial in the courtroom. It means, among

other things, Mr. Schleicher could not call you to testify.

You could not be forced to the witness stand like you are

now, you could remain at counsel table. And not only could

you not be forced to testify, no one could comment upon why

you might choose not to testify.

Do you understand that?

A. Yes, I do.

Q. No arguments making any implications that you should

testify could be made.

Do you know that?

A. Yeah.

Q. Okay. It's also possible you could go to trial and

testify, tell the jury your side of things, but because

you're pleading guilty, you're not going to be able to

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 10 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

11

testify or put on a defense by telling the jury your side of

things.

Do you know that?

A. Yes.

Q. Whether or not you chose to testify, it's still possible

to put on a defense through other witnesses. Ms. Durham

would have the right to ask me to issue subpoenas to require

individuals to come to court and to testify. You give up

your right to call witnesses by pleading guilty.

Do you know that?

A. Yes.

Q. Is anyone threatening you or forcing you to plead

guilty?

A. No.

Q. Any pressure being brought to bear on you from any other

sources?

A. Not really, no.

Q. All right. Other than in the plea agreement, which

we'll go over in just a minute, have there been any promises

made to you to try to get you to plead guilty?

A. No.

Q. You seem to have a good understanding of this and you're

an intelligent man. Is there anything you'd like to ask me

about what your constitutional rights are?

A. No.

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 11 of 34

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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Q. You're clear about what you're giving up by pleading

guilty?

A. Yeah, my life.

Q. Well, obviously some chunk of your life, some time, but

given the alternatives, is this what you've decided makes

the most sense for you?

A. Yeah.

Q. Let's talk about the plea agreement and I think

Ms. Durham has placed it there in front of you.

It says that you are -- begins by talking about

that you're deciding to plead guilty and that this agreement

binds you and the United States Attorney's Office for the

District of Minnesota. It doesn't affect any other United

States Attorney's Office or any other agency that might have

claims against you.

Do you understand that?

A. Yeah.

Q. And we'll skip over the part called "Factual Basis"

here, because that's the portion I alluded to earlier where

I'd like Mr. Schleicher to ask the questions for me if he's

willing to do so.

THE COURT: Are you, Mr. Schleicher?

MR. SCHLEICHER: I am, Your Honor.

Q. All right. So then we'll proceed to where it says

"Agreements and Stipulations."

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And it says that you are going to plead guilty to

Count 3 -- and we'll talk about that in a couple minutes --

which is the offense of making and subscribing a false tax

return, and the penalty for that is listed there in

paragraph 7. There is an agreement that the other counts

would be dismissed.

Do you understand that?

A. Yes, I do, Your Honor.

Q. Then the penalty for the Count 3 is listed there as the

lettered items: a maximum of three years imprisonment; a

fine of up to $100,000; the costs of prosecution; a

supervised release term of up to one year; and a mandatory

special assessment of $100. Those are all part of the

maximum penalty for this offense.

Do you understand that?

A. Yes, I do.

Q. It says also that there's a special assessment of $100,

and that's required to be paid at the time of sentencing.

And you should understand that the sentencing

guidelines which are discussed there in paragraph 9 will be

applied and that the Court may impose a sentence outside the

guidelines or a sentence lower than the guidelines depending

upon how various factors play out in this case.

Do you understand that?

A. Yes, I do.

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Q. Then based on what Mr. Schleicher and Ms. Durham know

about your case, they've analyzed how the sentencing

guidelines seem to apply to your situation. It's possible

that when I review it and go through this, particularly with

the assistance of the Probation Office, I might see things

differently and these numbers might change. Because I'm the

one wearing the black robe, you're stuck with my decisions.

Do you know that?

A. Yes.

Q. Then it says that based on what this offense is -- and

there's a tax table that talks about the tax loss, and

there's an agreement in your case that the tax loss here is

$12,677, which would place you in Category or Offense Level

of 12.

Do you understand that?

A. Yeah.

Q. Then it says that sometimes there's some specific

offense characteristics that apply. I'm talking now about

paragraph 12. The good news is that most of those would

move your number up, some move it down, but there seems to

be an agreement that none of those apply to your situation.

Do you understand that?

A. Yes, I do, yeah.

Q. And sometimes there are what are called adjustments that

are also in the guidelines, but the attorneys here also

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don't think any of those apply to you. But in paragraph 14

there's a tiny bit of good news, I guess, that there's

acceptance of responsibility. The Government's going to

recommend that I subtract two points as long as you testify

truthfully today at the change of plea hearing; that you

cooperate with the Probation Office in preparing your

presentence investigation, including a full investigation of

your financial status; that you make a good-faith effort to

pay the taxes owed for 2008 through 2010 before sentencing;

that you abide with all conditions of your pretrial release;

and that you take no further acts inconsistent with the

acceptance of responsibility. If you do all of those

numbered things there -- there are five of them -- then

you'd be entitled to have me deduct either two or three

points depending on what offense level you end up in.

Do you understand that?

A. Yes, I do, Your Honor.

Q. The other part of where you fit on this table, which I'm

sure you've gone over with Ms. Durham, depends on which

column you're in, and the thought is that you are in the

lowest category with no prior criminal history, so we're

going to proceed on that assumption today.

Do you understand that?

A. Yes, I do, Your Honor.

Q. If that proves to be true, you would be, depending on

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whether or not you got acceptance points -- and today I'm

going to kind of focus on what I call the worst-case

scenario, the toughest case scenario, knowing that you're

not going to complain if the sentence is less than that, but

I want to prepare you for what could be the high end, and

they've even included without acceptance there.

So it looks like the guidelines could be anywhere

from a low of six months to a high of 16 months depending on

whether or not there's acceptance and whether you're at 12

or a 10.

Do you understand that?

A. Yes, I do, Your Honor.

Q. Then it looks like the fine could be as low as $2,000 to

as high at $30,000 depending upon that number as well.

Do you know that?

A. Yes, I do, Your Honor.

Q. Then it says that there's an understanding here by you

that I'm required to impose the costs of prosecution, but at

this time there's an agreement that there are no recoverable

costs of prosecution that have been incurred by the

Government up to now.

Do you understand that?

A. Yup.

Q. The supervised release period -- that's the time that

you have to be under supervision after any time that you

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might be required to serve -- would be one year in your

case. If you violate any condition of your supervised

release, you could be sent back to prison for up to one

year.

Do you know that?

A. Yes.

Q. Turning to page 7, it says that you've agreed to make a

good-faith effort to pay the taxes owed here from 2008 to

2010 prior to sentencing, and you agree that you're liable

for additional taxes to the state and federal authorities

for the funds received but not yet reported in this

agreement.

Do you understand that?

A. Yes, I do, Your Honor.

Q. Then it says in paragraph 21 that other than what we've

already discussed, there isn't any agreement as to the term

of imprisonment, the term of supervised release or any of

the other possible repercussions of your sentencing.

Do you understand that?

A. Yes, I do, Your Honor.

Q. Twenty-two talks about an appellate waiver, and that

says that you're giving up your right to appeal -- and that

would be any decision I would make -- as a concession as

long as the sentence did not exceed the maximum duration of

the sentencing guidelines determined by the Court, so I

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think worst-case scenario on that would be the high end of

16 months.

Do you understand that?

A. Yes, I do, Your Honor.

Q. And you understand that you're giving up those rights

voluntarily and knowingly?

A. Yes.

Q. I generally think it's a good idea for somebody to check

my work and go over, make sure I'm doing my job

appropriately and exercising my judgment fairly, but you're

giving up the right to have anybody do that, apparently

because the prosecution doesn't want to defend that. They'd

rather, I guess, use their resources on other defendants

than you.

Do you understand that that's a part of your

agreement?

A. Yes, I do, Your Honor.

Q. And you're okay with that under the circumstances?

A. Yeah.

Q. Then it says that you waive your right to appeal your

guilty plea after I accept the guilty plea.

Do you understand that?

A. Yes, I do, Your Honor.

Q. Any questions you'd like to ask me about your plea

agreement?

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A. No.

Q. Okay. I am now going to read you Count 3 and then ask

you how you plead, and then Mr. Schleicher will ask you some

further questions.

As I'm sure you've looked at in great detail, your

indictment begins with a long background section and lots of

factual allegations which aren't officially a part of the

charge, but Count 3 realleges paragraphs 1 through 13 that

I'm not going to read unless you want me to.

Do you want me to go over those paragraphs, or do

you know what that background section says?

A. Yes, but I would allege that some of those factual

things aren't facts.

Q. Okay.

A. That Jason Meek lied at his proffer and then Lucinda in

turn said things at the grand jury hearing that weren't true

about me.

Q. Yes. And I don't -- it isn't important that all of

those allegations be true and correct. What is important is

that you're guilty of this offense, submitting a false tax

return, as it's stated in Count 3.

A. I know. I just don't want you to hold some of those

lies against me, because there are lies in there.

Q. Okay. And that's maybe something that can be sorted out

through the presentence investigation or further

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understandings. The thing that's going to be important to

me, Mr. Gikas, and that I want to make clear on today is

that you are guilty of the offense to which you're pleading.

A. Yes.

Q. There may be other things that people said or whatever

that aren't true, but I'm going to focus today on whether

you're guilty or not. Some of those other things might come

into play with regard to the sentencing issues, but those

are things we can argue about later, okay?

A. Okay.

Q. All right. It's alleged by the grand jury that from in

or about 2009, in the State and District of Minnesota, the

defendant, Matthew Nicholas Gikas, did willfully make,

subscribe, sign and cause to be filed with the Internal

Revenue Service an amended U.S. Individual Income Tax Return

Form 1040X, for the taxable year 2008, which was verified by

a written declaration that it was made under penalties of

perjury and which he did not believe to be true and correct

as to every material matter in that line 43 reported

purported taxable income of $101,885, when he well knew and

believed that $101,885 in taxable income was fictitious and

his taxable income was higher, in violation of Title 26,

United States Code, Section 7206(1).

To that charge of making and subscribing a false

tax return, what is your plea?

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THE DEFENDANT: Guilty.

THE COURT: Mr. Schleicher, at this point I'll ask

you to proceed with establishing the factual basis.

MR. SCHLEICHER: Thank you, Your Honor.

E X A M I N A T I O N

BY MR. SCHLEICHER:

Q. Mr. Gikas, I'm going to be asking you some questions on

the factual basis portion of the plea agreement. You've

read the factual basis portion of the plea agreement, is

that correct?

A. Correct.

Q. You read it in its entirety before coming today, is that

right?

A. Yes.

Q. And you understand that you're under oath and that you

have to tell the truth at this proceeding?

A. Yes.

Q. All right. Now, I'm going to talk to you about some

things that happened as far back as 2001, 2007 regarding

your relationship with the person identified in the

indictment and the plea agreement as Co-Conspirator A, all

right?

A. Okay.

Q. And for the record, Co-Conspirator A is an individual

named Jason Meek, is that right?

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A. Correct.

Q. Jason Meek is a person whom you employed at your

company, is that correct?

A. Correct.

Q. And when we talk about your company, we're talking about

two different entities, but your main company was Omni

Environmental Services, is that right?

A. Omni Environmental, Incorporated.

Q. Incorporated.

A. No "Services."

Q. Omni Environmental, Incorporated.

A. Yes.

Q. And that company was housed in a building owned by a

different entity called Gikas, LLC, is that correct?

A. Correct.

Q. Okay. So two different entities, is that right?

A. Yes.

Q. And then can you just tell the judge a little bit what

does Omni Environmental do?

A. We're an environmental consulting and engineering firm

that does environmental site assessments and selling

groundwater investigations, asbestos inspections, radon

mitigation.

Q. And specifically located your business in Rochester,

Minnesota, but you do this kind of work all over, is that

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right?

A. Correct.

Q. Okay. And Mr. Meek as an employee, what kind of

services was he employed to do at your business?

A. Well, all of them. We all do -- did everything. He was

an asbestos and lead-based paint inspector that none of us

were. That was his only other certification.

Q. And do you recall approximately when he began working as

an employee for your company?

A. I don't. I guess 2001, 2002? I don't know.

Q. Somewhere in there.

A. Yeah.

Q. But he worked for some period of time before the two of

you had an agreement whereby he would become a part owner of

the company, is that right?

A. Oh, yeah, for at least five years or so.

Q. And this happened right around December of 2007, is that

correct?

A. Correct.

Q. And we're talking about an ownership interest both in

the business, Omni Environmental, and in Gikas, LLC, the

holder of the property, is that right?

A. Correct.

Q. So the two of you had an agreement first with respect to

ownership interest in Gikas, LLC, and you were going to sell

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him a 50 percent interest in the company that owned the

building, is that right?

A. Correct.

Q. And the purchase price that you'd agreed to was

$73,799.20, more or less?

A. Yeah.

Q. Now, in addition to being a scientist and providing

these services, Mr. Meek was also a marijuana dealer, is

that right?

A. Correct.

Q. And he distributed marijuana to various customers,

including you, is that right?

A. Yes.

Q. And this generated some drug proceeds, is that right?

A. Yeah.

Q. The two of you then agreed to structure the purchase of

Gikas, LLC. There was a stated agreement and then there was

sort of a cash-under-the-table agreement, and the total

amounts of those two agreements would reflect the true

purchase price I recited, is that correct?

A. Yes.

Q. So the two of you executed a membership interest

purchase agreement which recited a purchase price of

$58,799.20, is that correct?

A. I haven't reviewed it, but yes, I'm thinking you'd know

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what it is.

Q. It's -- that one wasn't a typo.

(Laughter)

A. Okay.

Q. But verbally you had this agreement that in addition to

that stated purchase price there would be an additional

$15,000, is that correct?

A. Yes.

Q. And that $15,000 would be made up through some cash

payments and that happened throughout 2008, is that right?

A. I believe that's correct.

Q. And the way this was paid, Mr. Meek actually gave you a

cashier's check for $20,000, executed a note for the balance

of the stated price, and then you also received some cash

payments, but then there was some cancellation of various

debts for things, is that correct?

A. Correct.

Q. And that took place during the course of your working

relationship, true?

A. Yeah.

Q. Now, the same time, you executed another agreement and

this was for the more valuable of the two entities, and

that's Omni Environmental, yes?

A. Well, yes, but I wouldn't say that. I'd say the

building was more valuable than Omni Environmental. Omni

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Environmental has zero value once I'm a felon and I lose my

professional geologist license. It'll be worth zero. Once

Jason gets out of prison and tells all my clients, all my

competitors, that I'm a felon, it'll be worth zero.

Q. Back in 2007, though, when you're negotiating this, this

was a valuable company, is that right, this is something

you'd built since 2001?

A. It was very valuable between '95 and 2007 when the

economy tanked and I was going to have to fire Jason and

Jeff, and I had already fired six other employees. They

were the last two left and there was no business. In 2008,

2009, 2010, there was basically no business.

Q. But business was pretty good in 2007, at least? That

was the tail end of --

A. The tail end of the good times, yeah.

Q. And when the economy tanked, are you talking about the

real estate market specifically?

A. Yes.

Q. Because that is directly tied to people needing those

kind of services, is that right?

A. Correct.

Q. So in this deal, Mr. Meek was to buy a one-third

interest in your company, is that right?

A. Correct.

Q. And again, there was a stated price and then a

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cash-under-the-table price, is that right?

A. Yes.

Q. The two of you agreed upon an actual purchase price of

$110,000, but you executed a written stock purchase and

option agreement reciting a purchase price of $50,000, is

that right?

A. Correct.

Q. And then you verbally agreed that Mr. Meek would provide

the remaining balance of that money through some periodic

cash-under-the-table payments during 2008, is that right?

A. That's correct. Those were specifically his ideas and

he wouldn't have paid for the building or Omni if I wouldn't

have done the cash payments. I didn't want to do the cash

payments.

Q. Right. But Mr. Meek's interest in this is that he

wanted to launder his drug money.

A. Correct.

Q. Your interest is that you wanted to sell part of your

business.

A. I wanted to save my house and my ex-wife's house and --

yeah, I was going out of business, basically.

Q. So Mr. Meek then paid you additional occasional cash

payments or made debt reductions to you for -- to the amount

of about $55,000 during the year 2008, is that right?

A. Well, I think -- well, and maybe 2009. I don't know.

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Q. At least beginning in 2008 --

A. Beginning in, yes.

Q. Ending on or around 2008, 2009, somewhere in there?

A. Yes.

Q. And I understand this is stuff that happened years ago.

A. Right, and I wasn't keeping track.

Q. Now, Mr. Meek wasn't supposed to just be a nonworking

partner in this operation, he was supposed to actually

generate billable hours for your company, is that right?

A. Yeah.

Q. That was the expectation.

A. He did, yeah.

Q. And he did fall behind on that to some degree and he

tried to substitute some cash or cash equivalent payments to

you, the total value of which is about $7,000, beginning in

about 2010, is that right?

A. Correct.

Q. And so you understand that the extra amounts are income

to you, and when you filed your tax returns by only

reporting what was stated and not reporting what was

actually gained, that was a false tax statement, is that

right?

A. Correct.

Q. So beginning -- specifically, I'm looking particularly

at paragraph 5. Tax year 2008, you signed and caused to be

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filed with the IRS an individual tax return Form 1040,

standard form, and then later you had filed an amended

income tax return for that same tax year, and that's the

1040X. And you filed that on April 15, on or around

April 15, 2009, and in those returns you state that your

taxable income for the 2008 calendar year was $101,885, is

that right?

A. Yes.

Q. You've looked at the discovery --

A. Yes. I guess -- you know, I'm not positive, don't -- I

have the form in front of me and I didn't look back on this.

I guess I should have.

MS. DURHAM: Well, we have reviewed the discovery

in this case, correct?

THE DEFENDANT: Yeah.

MS. DURHAM: And you've been dealing with this

case for several years, fair to say?

THE DEFENDANT: Yes. I believe it's correct.

MS. DURHAM: Okay.

THE COURT: Put another way, you don't have any

way to disprove --

THE DEFENDANT: I don't have any way to disprove

it and I'm positive that he's telling the truth. I just --

I don't know off the top of my head that that was the actual

number, and you don't want me to lie.

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THE COURT: Understood. Right.

THE DEFENDANT: So I'm telling you I'm just

trusting him.

BY MR. SCHLEICHER:

Q. At the time that you filed those tax returns, you knew

that your income was actually more than that, is that right?

A. Correct.

Q. And that your income was actually -- when you add up the

cash-under-the-table payments for that year, your income

would have been $162,045?

A. Thereabouts, yes.

Q. Okay. And you also knew that had you reported that

actual amount, your taxes would be higher, is that right?

A. Right.

Q. Okay. You knew that it was -- you knew that it was a

crime to file a false income tax return?

A. Yeah.

Q. And you did this voluntarily, no one forced you to file

the return, is that right?

A. No one forced me to.

Q. All right.

MR. SCHLEICHER: Your Honor, the Government is

satisfied with the factual basis and has no further

questions.

THE COURT: Ms. Durham, did you have any questions

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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of your client at this time?

MS. DURHAM: No, Your Honor. Thank you.

THE COURT: Mr. Gikas, I understand that with

regard to specific numbers and figures and times, this all

happened sometime back and obviously you weren't taking

careful note of the records and the amounts. What I need to

be assured of today is that you are guilty of this offense

and there's no doubt in your mind about that, this income

tax return filed was false, right?

THE DEFENDANT: I believe I evaded the 55,000 of

long-term capital gains tax, which is $11,000, but they have

$12,067, but in that year --

THE COURT: But you are guilty and you know you're

guilty of that?

THE DEFENDANT: Yeah. Yeah.

THE COURT: We can talk about the amount, but --

THE DEFENDANT: Yeah, I mean, whatever it is. I

don't know. I think some of it was in 2007 and some was in

2009, so it might not even have been 55,000 in 2008. Jason

was late on a lot of the payments and gave me a lot of

rigmarole and lies.

THE COURT: Well, that said and some

justifications for how this came to be, bottom line, you are

guilty of filing a false tax return knowing it was false --

THE DEFENDANT: Yes.

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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THE COURT: -- true?

THE DEFENDANT: True.

THE COURT: I'm prepared to accept your guilty

plea if that's what you want me to do, knowing that you

can't change your mind about going to trial.

THE DEFENDANT: Yes.

THE COURT: Okay. Your guilty plea is accepted.

I will refer the case to the Probation Office. Mr. Stevens

is seated at the back table and he'll make sure the process

of the presentence investigation gets started today.

In light of your guilty plea, I have added a

condition to your conditions of release that you not possess

firearms, other dangerous weapons at this time.

Do you understand?

THE DEFENDANT: Yes.

THE COURT: Okay. And that's been added today,

so --

MS. DURHAM: Your Honor, if I may ask a couple of

questions in relation to some of the comments he's made.

THE COURT: Sure.

E X A M I N A T I O N

BY MS. DURHAM:

Q. Mr. Gikas, you and I have met on several occasions over

the course of my representation of you?

A. Yes.

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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Q. We've talked about the case, we've talked about the

facts and the discovery, correct?

A. Correct.

Q. We've talked about the guidelines and we've talked about

how the tax table within the guidelines applies to the

calculations as they're set forth in the plea agreement?

A. Yes.

Q. Did I answer all of your questions at that time about

how these numbers are arrived at in terms of taxable income

versus gross income?

A. Yes.

Q. And did I answer your questions with regard to that?

A. Yes.

Q. Thank you.

MS. DURHAM: I have nothing further.

THE COURT: Okay. Thank you, Mr. Gikas. You may

step down.

THE DEFENDANT: I do have a .12 gauge shotgun for

hunting. Can I sell that, or what do I have to do?

THE COURT: You should talk to your pretrial

officer about that and I think transfer it to somebody

else's possession now and not be around --

MS. DURHAM: And I'll talk with him about it as

well, Judge. He should just get it to somebody else's house

tonight.

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TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCP(612) 664-5108

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THE COURT: Okay. I think so.

All right. Thank you.

MS. DURHAM: Thank you.

THE COURT: Court will be in recess.

(Proceedings concluded at 3:37 p.m.)

* * * * *

C E R T I F I C A T E

I, TIMOTHY J. WILLETTE, Official Court Reporter

for the United States District Court, do hereby

certify that the foregoing pages are a true and

accurate transcription of my shorthand notes,

taken in the aforementioned matter, to the best

of my skill and ability.

/s/ Timothy J. Willette

TIMOTHY J. WILLETTE, RDR, CRR, CBC, CCPOfficial Court Reporter - U.S. District Court

1005 United States Courthouse300 South Fourth Street

Minneapolis, Minnesota 55415-2247612.664.5108

CASE 0:14-cr-00047-ADM-FLN Doc. 79 Filed 04/13/15 Page 34 of 34

STATE OF MINhIESOTADEPARTMENT OF COMMERCE,

PETROLEUM TANK RELEASE COMPENSATION BOARD

In the Matter of Chosen Valley Testing, Inc.l4i0 7th StreetNWRochester, MN 55901,

SETTLEMENT AGREEMENT

The Commissioner of the Department of Commerce ((tCommissioner')) has advised

Respondent Chosen Valley Testing, Inc. "(CVT") that he is prepared to eommence action based

on the following allegations.

1. In August 2015, CVT acquired ali of the assets of Omni Environmental, lnc.

("Omni"), including its contracts with its clients where further work needed to be performed.

The purchase agreement stated that all accounts payable attributable to the business prior to the

closing date would be the responsibility of Omni. The principal owner of Omni ("Empioyee A")

became an employee of CVT at this point, The Petrofi:nd staff liad earlier commenced an

investigation of Omni based on its receipt of conflicting cost information regarding the amount

of Omni's employee time biiled on its invoices to numerous clients. Beginning in February

2015, Petrofund staff sent letters to fifteen Omni clients requesting all documents specifying the

amount of time spent by Omni employees in connection with each application, including a

specific designation of which timesheet item applies to which invoice.

2. Petrofund staff also sent letters to Ornni indicating that in connection with Leak

No. 19321, Kolokithas & Sons, Inc. (Apollo Superette), Omni timesheets failed to document

$1,459.65 submitted to the fund fbr reimbursement. Omni sent the Petrofund a check for this

amount. Petrofund staff also denied a total of $3,998.00 in Omni billings for five separate

reimbursement applications between November 2, 2075 and February 22, 2016 because they

were not documented by employee time records. These reductions were not appealed to the

Pekofund Board.

3. Petrofund stafffurther identified five applications in which employee time records

had been changed to inciude higher amounts since they had previously been submitted on other

applications. The altered timesheets inciuded the following:

l. Gernentz Auto Service (Leak No. 19555): One day of equipment added to

subsequent tirnesheet for Employee A;

2. Johnson Tire Service, lnc. (Leak No. 19535): Five hours, 100 miles, one

day of supplies and one day of equipment added to subsequent timesheets

for Employee A;

3. D.I.D.D., Inc. (Leak No. 12077): Five miles added to subsequent

timesheet for Employee A;

4. Goldmark Property Management, Inc. (Leak No. 19792): Three hoursadded to subsequent timesheet for Omni employee Employee B;

5. Goldmark Property Management, Inc. (Leak No. 19794): Two-and-one-half hours added to subsequent timesheet for Employee B.

On May 4,2AL6, Pehofund staff sent to the attention of Employee A, a letter idend$ing the time

record changes and requiring the following information: i) the identity of the person who

changed the time records; 2) when the timesheets were changed; and 3) the basis for the changes.

4. By letter dated May23,2016, Employee A stated that either he or other Omni

employees made the changes at the time of invoicing the clients. in five instances, ernployee

time increased from one record to the next and in five instances other charges for equipment,

supplies, or mileage were increased. Employee A claimed that the changes were made to reflect

the actual time and equipment used and that aU of the costs were still within the approved

budget, but provided no evidence to document his assertion. The Department's position is that

the altering of the timesheets was fraudulent.

5. On June 74,2016, the Department took a sworn statement from Employee A. He

again contended that the modifications were made to correct sloppy record keeping and to reflect

actual time spent and equipment used, but again provided no evidence to documEnt this

assertion. He stated that he alone, not any of his employees as he earlier stated, changed the time

records, lle also stated that he changed the time records ai issue in response to the Department's

ietlers, not at the time of invoicing as he earlier stated. He further admitted that if Petrofund staff

obtained time records for other applications, they would find additional instances of time records

not supporting the company's invoiced costs. Peirofund staff determined that the original time

records were falsified by Employee A to avoid the denial of reimbursement by the Petrofund for

the undocumented costs.

6, The Petrofund staff, in August 2016, found that Employee A submitted a

corrective action proposal to a client on behalf of CVT which made numerous representations

concerning t}re Petrofund program and rules. These statements included the following;

Any reductions to your reimbursement application will not be the fault of CVTbut will likely be from arbitoary actions of State employees. Any reductionsshould be discussed with your State Senator and Representative as the Petrofundstaff has likely arbitlarily determined that you are not eligible for the monies thatare set aside for you. There is simply no way to complete this job cheaper orwithin eleven-year-old guidelines set forth by the Petrofund Staff.

i<:t*

Additionally there are concerns that because the MPCA took from October of lastyear until July that the subcontractor costs may have gone up but we will try tocollect new bids, prior to conducting the work, Additionally because thePetrofund Form entitled "Contractor Services" is based on costs from eleven (11)years ago and has no meril in today's contracting fees schedules or typicaiinvoicing for tirese types of services, the costs will be biiled as shown on theattached form.

*'8{.

Any reduction to the reimbursement should be discussed with fyour] StateSenator and Representative and an Appeal of any reduction will inevitability end

up in court. CVT cannot and will not be held liable for any reductions to yourreimbursement application. You will need to stay vigilant in working with yourlegislators to receive a fair and just reimbursement.

Actually, and contrary to the representations in the proposal, Petrofund maximum rates eligible

for reimbursement have been raised by fi% on two occasions, in 2006 and again in 2011,

pursuant to Minn. R. 2890.1900 and 2E90,3900 (2015). Contrary to the representations,

moreover, a contractor bid subrnitted as part of the August 2016 CVT proposal included a

contract for services bid from a construction company which included the adjusted costs that

took effect on July 1, 2011. Previous Petrofund reimbursement applications involving Omni also

included the updated maxirnum costs noted above. Accordingly, Employee A knowingly made

false representations to a client conceming the Petrofund program and rules. Respondent is

responsible for the active remediation proposal,

7. The Petrofund staffs investigation further revealed that between October 2016 and

February 2017,Employee A repeatedly failed to provide information necessary to document the

eligibility and reasonableness of costs included in a CVT corrective action proposal submitted

for Petrofund staff review, As part of the proposal submitted in October 2016, CVT included

costs to remove and replace 1,150 square feet of concrete at a leaksite. When Petrofund staff

requested a scaled site map showing the area of the concrete, the first document submitted by

Employee A identified only 336 square feet. When Petrofund staff requested an accurate site

map, Employee A sent a second map showing only 488 square feet of concrete. Petrofund staffs

subsequent requests for an accurate site map went unanswered until CVT's client forwarded an

email to Petrofund staff in February 2017 in which Employee A stated that 1,040 square feet of

concrete would be removed and replaced. Employee A, however, did not provide a scaled site

map documenting the 1,040 square feet of concrete, CVT has failed to respond timely and

completely to the Petrofund staffs requests for specific information needed to support and

document the reasonableness and eiigibiiity of costs included in CVT' active remediation

proposal,

Vlolarroxs

Count I

By submitting falsified records and making false statements and claims to the

Department, the Deparhment aileges Respondent's Employee A violated Minn. Stat.

$ 11sc.1 12(4) (2016).

Count II

By submitting faise timesheets, &e Deparlrnent alleges Respondent's Employee A

demonstrated untrustworthiness and financial irresponsibility in vioiation of Minn, Stat.

$ 11sc.112(10) (2016).

Count III

By rnaking material misrepresentations or omissions to the Comrnissioner, the

Department alleges Respondent's Employee A violated Minn. Stat. $ 1 15C.1 i2(1 1) (2016).

Count IV

By providing false information to the Commissioner, the Department alleges

Respondent's Employee A violated Minn. Stat. g 45.027, subd. 7(a)(3) (2016).

Count V

By billing clients for time spent on services not actualiy documented in company records,

the Department alleges Respondent's Employee A demonstrated financial irresponsibility in

violation of Minn. Stat. $ 45,027, subd. 7(a)(4) (2016).

Count VI

By making misrepresentations to a client conceming the Petrofund program and rules, the

Department alleges Respondent's Employee A demonstrated untrustworthiness in violation of

Minn Stat. $ 45,027, subd.7(a)(4) (2016) and 115C.112(10) (20i6).

Respondent has agreed to informal disposition of this matter without further proceedings

as provided by Mina. Stat. $ 14.59 (2}rc) and Minn. R. 1400.5900 (2015) and firther agrees that

Respondents will cease and desist from committing further violations of law. All timesheets and

other submissions to the Petrofund for work after the date of the asset purchase will be reviewed

and verified as accurate by an employee other than Respondent's Employee A before submittal to

the Pehofund. Respondent will only bill clients for time spent on services as actually

documented in company records. All future contact and correspondence by the Respondent with

Department of Commerce and Petrofund staff and members of the Petrofund Board will be

through Respondent employees other than Respondent's Employee A. Nothing in this consent

shall constitute an admission of liability or responsibility of Respondent for actions by Omni or

Employee A concerning the work completed prior to the date of the Asset Purchase, and all

outstanding applications pending for work performed by Omni are not the responsibility of

Respondent. Representatives of Omni will continue to be responsible for issues regarding those

applications.

Dated: 1012412417 MIKE ROTHMANCommissioner

MARTIN FLEiSCHHACKERAssistant Commissioner - Enforcement

Minnesota Department of Commerce85 7th Place East, Suite 500St. Paul. MN 55101(6s1) 53e-1600

The undersigned, Colby Verdegan, states that he is an authorized representative of CVT,

that he has read the foregoing agreement, that he knows and fully understands its contents and

effect; that he has been advised of his right to a hearing in this matler, to present legal argument

to the Commissioner, and to appeal from any adverse determinalion after a hearing, and

Respondent hereby waives those rights; thai he has been represented by legal counsel in this

matter, and that he consents to entry of this settlement agreement by the Commissioner. It is

further understood that this agreement constitutes the entire setllement agreement between the

parties, there being no other promises or agreements, either express or implied.

ti. lt)l\U lt-iDated: t"i Al ll/

Its: President