In the fall of last year, Colin Chisholm strode into a Citibank on Ventura Boulevard in Woodland Hills, California. Burning a hole in his pocket was a check for $120,000. He asked for cash in $100 bills, then hopped a plane to Minnesota with all the makings of an escape.
From his historic Deephaven mansion on the shores of Lake Minnetonka, Chisholm had steered a series of telecommunications companies with holdings in the Caribbean. As CEO, the 61-year-old with creased eyes and a graying pate wielded the respect and admiration of those around him. No one knew just how dire his situation had become.
Without warning, Chisholm stashed a cache of boxes loaded with dubious receipts in his unsuspecting neighbor's basement. He and his wife, Andrea, yanked their 6-year-old son, Colin Jr., out of school before the semester ended and said goodbye to their pack of orange-and-white Cavalier King Charles spaniels, who had names such as Driving Miss Maisie.
After packing their bags, the Chisholms fled their lakeside home with the chipped white paint and fading green roof, high-tailing it through the forested, winding private road and stone archway that had once been the gateway to new lives.
By the time Hennepin County Sheriff's deputies came looking for the Chisholms, in February, they were nowhere to be found.
The next few weeks were a mad and dizzying affair. Investigators haven't made it clear whether the $120,000 check came from one of Colin's investors or wealthy family members, but if he had that kind of cash, he shouldn't have needed to steal from taxpayers' coffers. In one of the biggest welfare fraud cases in recent memory, Colin Chisholm was accused of raking in more than $167,000 in welfare, food stamps, and medical care from Minnesota and a yet-untold amount of public assistance in Florida.
Although the Chisholm case is unusual — only about 5 percent of welfare-fraud investigations end up in court each year — it highlights a hole in the system, one that's built almost entirely on faith.
There are national databases that can check whether people are receiving benefits in multiple states. But most folks are caught through tips, says Jerry Kerber, inspector general at the Minnesota Department of Human Services. There's nothing "in place to go check people's lifestyle and see whether or not their lifestyle really does match what they're claiming in income."
In Florida also, the system is fundamentally reactive. A February audit of the state's Division of Public Assistance Fraud released notes that Broward County has only five investigators who each deal with 953 cases per year for a salary of $11.83 an hour. On top of being overworked, they're unprepared: Not one of Florida's 42 fraud investigators has a college degree in financial analysis. The audit found that about 13 percent of referrals eligible for investigation were dismissed or ignored and that 12 percent of cases they closed were dismissed simply because there was not enough manpower to investigate them.
So while the Chisholms were able to fly under the radar in Minnesota, they were basically anonymous in Florida, where investigators were overwhelmed.
Regardless of the circumstances, to those who knew the Chisholms, the accusations were inconceivable. The couple was practically royalty, with seemingly bottomless pockets. They rubbed elbows with media power brokers and addressed themselves in social settings as Lord and Lady — the descendants of Scottish aristocrats.
"I'm having a hard time thinking that Colin is this person everyone says, but everything's pointing to it," says Kim Ritter, a family friend. "The facts are speaking loud and clear."
The walls of the Chisholm home shined with oil portraits. In the middle of the rented mansion stood a chapel, where Colin liked to take guests after showing them a registry of notable yachts in North America, one of which he owned.
At dinner parties, Andrea entertained friends with a genuine and affable air. Her seven purebreds were worth an estimated $2,000 each and looked like they had leapt from a Rococo watercolor. Her hair was bright red and immaculately kept under the white puffy hat that made an entrance before she did.
Smart and gregarious, the Chisholms struck many of their friends, neighbors, and associates as New Yorkers who'd just flown in from Gatsby's West Egg.
"They were gracious people," says John Peterson, a fellow Lake Minnetonka Kennel Club member. "They didn't put on airs."
They also cut an imposing figure when they moved to Florida in 2005. There, Colin tooled around town in a two-seater Lexus, squiring guests from marinas to a $1.5 million rental home in Lighthouse Point. He boasted that his yacht had been built by his great-grandfather — Hugh J. Chisholm, a prominent Maine industrialist. And though Colin looked a world apart from the salty sea dogs he employed, he impressed them with his first-rate seamanship.
During a tumultuous eight-hour trip down the Intracoastal Waterway after Hurricane Wilma in 2005, Colin served as a second set of eyes for the captain. Together they piloted through floating palm trees, sunken vessels, broken bits of docks, and stray buoys on the way from northern Florida to their home port in Aventura.
When he wasn't gushing about his boat, he was name-dropping powerful people. Colin spoke of Washington's inner circle as if they were guests at his cocktail party. Like President George W. Bush, he was fond of referring to the vice president's chief of staff as "Scooter," the way he would an old boarding-school chum.
"He was a brilliant guy," one of the seamen says. "Colin was a great conversationalist."
Lest there be any doubt about Colin's bona fides, the men in his life were treated to private viewings of his personal financial statement. After dinner, he would pull them aside — away from the ears of the wives — and reveal the wonders of his treasure chest.
It was almost pornographic: $67,500 in antique furniture alone; a 1950 Chris Craft U-22 and 1968 Chris Craft 26-foot Cavalier estimated at $72,000. When you factored in the successful media businesses, the Chisholms proudly claimed $97.3 million on paper.
Best of all, Colin wasn't shy about sharing his good fortune. He found a willing pool of investors at Episcopal and Catholic churches throughout the Twin Cities. If holding out a collection plate for business endeavors seemed odd, no one questioned his motives. After all, Colin was a member of the exclusive Knights of Malta, the world's oldest surviving order with roots in the First Crusade.
A local Catholic newspaper thought so highly of Colin that he was profiled in an article about the employment ministry at the Basilica of St. Mary. After becoming a member in 2007, Colin began volunteering his time as a job coach, preaching the virtues of teamwork and encouraging his pupils to think like "C-level employees" — the executives at the top of the food chain with titles that started with "Chief."
Even more impressive were the connections he'd made as a businessman. One day at the Basilica, Colin pulled out his cell phone and rattled off contacts that included high-ranking officers at national broadcasting companies, according to Kim Ritter.
At 52, Ritter was down on her luck and questioning the value of networking events. Finally, she had found someone sincere.
"Out of all the people when I was unemployed, he made me feel good about myself," Ritter says. "He never said I couldn't do anything."
Colin's reference helped her get a full-time job, and the two maintained a friendship outside the Basilica. When she was diagnosed with cancer the following year, Colin offered to drive her to treatment. He asked a prayer group to knit her a shawl.
She sold her house in Apple Valley and moved in with her folks while looking for a smaller place. She reached out to Colin for help, noting that she'd made $20,000 off the previous home sale.
It didn't take long for Colin to get back to her with an odd request. He agreed to negotiate the purchase of a new town home but asked if he could borrow that $20,000, Ritter remembers.
Which got her thinking: Why would a successful CEO ask a sick woman for a loan?
In light of the new revelations, Ritter is compelled to ask herself today whether the friendship was ever real. Choking back tears, she says, "I don't know the answer to that question."
Colin came by his ambition honestly. His mother, Mary, became Maine's first female Democratic state senator in the fall of 1964, when he was 12. She assumed her seat from Cape Elizabeth with a promise to represent the voices of the dispossessed.
"I campaigned on them," she confidently told a reporter, "and I campaigned hard."
It would be his first taste of the spotlight. As he grew, however, Colin defied the popular knock against being a senator's son. Whereas future movers like Bill Clinton and Dick Cheney took pains to dodge the draft, Colin willingly signed up for the armed forces during the Vietnam War.
The call of duty brought Colin to the Marine Corps Air Station in Jacksonville, North Carolina. There he bought his cigarettes from a Southern belle named Virginia Nance. She hardly knew the young man but followed friends back to his apartment one night. The lawn furniture he used as a living-room set did not impress, though she was taken by his charms.
"He could sell a snowball to an Eskimo," Virginia recalls. "I loved the man."
There would be no pickup line, no pitch. Instead, Colin put on his best suit and tie and showed up at the Nance family doorway to ask for her father's blessing of the courtship. A fellow Marine, her dad approved. One dinner led to another, and a year later, in the summer of 1973, the couple said, "I do."
With the threat of war behind him, Colin moved his family — including Virginia's 4-year-old daughter, Mary Kathryn — back to New England to follow in his father's footsteps out of the armed services and into sales.
By 1980, Colin had talked his way into a job at CNN's New York office. At a media event in Atlanta, the presence of a certain mustached mogul made such an impression that Colin decided to strike out on his own.
"He wanted to become the next Ted Turner," Virginia says, "so he quit."
Over the next three decades, Colin would craft several companies out of a single idea: piping American television to cruise ships and resort hotels in the Caribbean. He relied on investors and whatever money he could scrape up from family, including $68,915 from his wife's 401(k) after an early retirement from AT&T. He struck a tentative $26 million agreement with General Electric to rebrand existing CNBC and E! programming.
As his dream took root, Colin turned his attention to his family lineage. On a trip to Scotland, the Chisholms stayed with distant relatives in Inverness, the northernmost city in the U.K., which sits at the mouth of the River Ness. There he visited Erchless Castle, once the seat of the Chisholm clan, known throughout the Highlands for their dexterity at rustling cattle.
Colin returned to the States referring in good humor to his wife as Lady and himself as Lord. But as the titles were repeated ad nauseam, they stopped sounding like a joke.
All was not well at the Chisholm manor. As the 1980s receded, the trappings of wealth began to fall by the wayside, to be replaced by a long list of debts. In 1990, Midlantic Home Mortgage Corp. began foreclosure proceedings on the couple's Northport, Long Island, home. The money from GE never came, because Chisholm failed in the final hour to stitch together the last $2.5 million needed to keep up his end of the bargain.
The family boxed up its possessions and headed to Maine, where Virginia was forced to take a job in a flower shop. Before long, both angry and tired, Virginia had found her way back to Jacksonville, North Carolina. Once there, her daughter filed for bankruptcy, alleging that Colin had cosigned with her on a credit card and ran up $40,000 in charges.
After years of living apart, Virginia marched into the Onslow County Courthouse on May 7, 2002, and filed for an official separation. She called Colin to relay the news — but she was in for a surprise of her own.
"We're already divorced," she remembers him saying. "I got a quickie."
He wasn't kidding. In October 2001, Colin had filled out paperwork at Nevada's Second Judicial Courthouse in Reno. Virginia's signature appears as a joint petitioner, but she swears someone forged it.
Colin also presented clerks with an affidavit from a resident who claimed under penalty of perjury that Colin had established temporary residency in Hawthorne, Nevada. That witness happened to be Eric Brix — the brother of the woman who would become the new Lady Chisholm.
Andrea Brix was raised in Estherville, Iowa — a small town of about 6,000 — by a single mom who was known for reclusive behavior. From the beginning, Andrea took a different path, forging a robust social life as a popular cheerleader with a well-earned reputation for partying.
Inspired by a classmate who made it onto a soap opera, Andrea moved to New York in her mid-20s. At five-foot-seven, the graduate of Nancy Bounds Modeling School knew she'd never be tall enough for the runway, but she figured she could get some print work down the line. Besides, she was living at the center of the country's wealth.
"She was so much more interested in money compared to anybody else I knew," remembers Kathe Beauvais, a childhood friend and bleached-blond nurse. "She could tell the ones who had money, and that's who she was really impressed with."
In spring 2002, after the new couple had settled in Connecticut, Colin slid a diamond ring onto Andrea's finger to make their engagement official. Unfortunately, the expensive bauble was well beyond his means. He had been able to afford it thanks to a happy accident.
The previous year, Caribtel Limited, one of Colin's companies, had entered into a contract with Verizon to facilitate international telephone calls. But when Verizon merged with Bell Atlantic the following year, the bank wire information had to be reentered manually. The routing number for Caribtel was erroneously substituted for Qwest Communications International's. The typo bequeathed Colin a windfall of more than $250,000.
Moving to correct the mistake, Verizon made phone calls to Caribtel, then sent a letter seeking restitution. Colin responded by offering to repay the debt with the equivalent in media time, according to a Verizon attorney, but the company wasn't interested in free commercials. It filed a lawsuit instead.
Colin was summoned to appear in U.S. District Judge Alfred V. Covello's courtroom in New Haven, Connecticut, but he failed to show up. Covello awarded default judgment to Verizon and ordered Colin to pay $260,000 to cover fees and interest.
On November 23, 2002, Colin's 51st birthday, he was arrested and questioned about the money he still owed. He told Greenwich investigators that he had used it to buy a diamond ring and pay down the debt on his lavish wedding reception.
"It's all gone," Colin testified. "I don't even have enough to pay my attorney."
The couple retreated to a cottage in New Canaan, Connecticut, on a private road shrouded by trees. Colin put down the security deposit and the first month's rent but promptly stopped making payments, according to court papers. The landlords nagged him until he finally produced a check for $9,029. It bounced.
New Canaan Police pulled into the driveway on a bright day in February 2004 with a warrant in tow. Colin greeted two officers at the front door and showed them his driver's license before being led peacefully to the squad car. At the station, he had a ready excuse: His company had stopped payment of the rent check. A bail bondsman put up the $9,000 to spring him from jail.
All might have been forgiven had Colin honored his rent agreement. Instead, he skipped court. A second warrant was issued for his arrest — along with a bail bond for $20,000.
It would be another year before the matter was resolved. All told, Colin would end up $42,029 in the hole.
By then, the Chisholms had packed up their things and moved on. They already had their eyes on a new source of revenue: the taxpayers of Minnesota.
Coast Guard officers stormed the 83-foot yacht, careful not to damage the solid-mahogany dining table that cost $15,000 and ran 15 feet long. Just off Pompano Beach, they searched all three bedrooms, looking for the Lord and Lady of the high seas, but came up empty.
Colin had spent much of his life pursuing the boat himself. In 2004, he stumbled upon the advertisement for the $1.4 million Wishing Star in Stuart, Florida, formerly named the Aras when it was owned by one of his distant relatives. The yacht was the ultimate symbol of wealth; designed by Trumpy, it had all the cachet of the New York real estate tycoon with whom it shared the name. After taking ownership of Wishing Star, Colin rechristened it the Andrea Aras. He used it as a corporate headquarters for his company, the Caribbean Network (TCN), and it was likely the first major purchase he made with investors' money.
For almost a year, he was able to stay afloat. Colin projected an air of confidence to potential investors without saying a word. He took church groups out on the high seas, and by the time they returned to shore, the parishioners would be ready to invest in any one of Colin's companies.
"They wanted to have a positive image of success and profitability, even though the company had yet to earn any money," says Thomas Kelly, Colin's attorney.
But it was all an illusion. Colin had agreed to pay $1.2 million for the yacht, dropping $220,000 up front. True to form, he stopped making monthly payments soon after.
Figuring they were in danger of having the yacht repossessed and lacking the $157,000 lump sum payment that was due, the Chisholms took the boat north to Savannah, where they spent the summer entertaining important guests, like the mother of then-Georgia Gov. Sonny Perdue.
"They were hiding out," recalls the captain who piloted them there.
The Chisholms sailed back to Florida thinking the heat was off. A couple of months later, Colin called another captain — his newest hire — in a panic.
"The Andrea Aras has been stolen from us!" he blurted.
Of course, the captain had no way of knowing about the financing situation, and he liked his new employers quite a bit. Just a week earlier, Colin had offered him $84,000 a year to pilot what was probably the nicest boat the veteran mariner had ever laid eyes on.
So the captain dialed some buddies, who helped him track the Andrea Aras to outside of Pompano Beach.
"The federal marshals were onboard and told us we better get out of the way," he recalls. "I looked pretty stupid at that point in the game."
Medica Insurance agents scoured the paperwork with suspicion. More than $60,000 in public assistance health claims had been frittered away on massages and other services at the Marsh, a wellness center and spa in Minnetonka. Worse yet, the recipients of this largesse were a couple who lived in a historic lakeside mansion valued at $1.6 million.
Something clearly didn't add up. The case fell into the laps of Amanda Lange and Michael O'Hara, two veteran Hennepin County fraud investigators. Combined, they brought more than 50 years' worth of experience to the table. And in 2013, they came to the same conclusion: The Chisholms had been shameless with the government cheese. The scheme, as the investigators would later allege, had been concocted in 2004 and would require lying about their income and home address for eight years.
When first filing for welfare, the Chisholms claimed residency in Andrea's mother's home in south Minneapolis — a diverse and middle-class part of the city — but failed to provide any proof of income, an obvious red flag. Hennepin County wisely denied the application, but the state went ahead and approved it without a second glance.
Throughout their time in Florida, the Chisholms had been sucking at Minnesota's teat. On February 1, 2007, when Andrea gave birth to Colin Jr. in Palm Beach, the entire pregnancy and more than two years of expenses were covered by UCare, the state health-care provider. The total cost to Minnesota taxpayers: $22,136.
Although the Chisholms also collected welfare benefits from Florida, the Sunshine State's Department of Financial Services won't provide any details about its ongoing investigation. The case was referred to it by the Hennepin County authorities, but it has yet to be passed along to the State Attorney's Office.
Returning to Minnesota in April 2007, the Chisholms became even more brazen and successfully applied for food stamps. Over the next five years, the couple signed and submitted 13 forms for benefits. All told, they reaped $167,420 in free services from the state.
In early 2012, growing suspicious, the Hennepin County Human Services and Public Health Department asked the Chisholms to produce any and all personal and corporate financial filings. In a response letter, Colin maintained that he was indeed indigent.
"As to TCN," Colin added with emphasis, "that company did not get funded and never filed anything."
The county didn't buy it and moved to cut off benefits. After a year of digging, Lange and O'Hara were about ready to complete their investigation. There was just one last piece of the puzzle: Andrea's grandmother.
Eloise Heidecker was suffering from dementia and needed constant care, but the Chisholms had failed to list her as a housemate with substantial assets of her own. When searching the elderly woman's bank statements, investigators found that Andrea — who maintains power of attorney over Heidecker — had deposited checks from company investors in the old woman's account and paid herself handsomely for the couple's personal needs. In April 2011 alone, the Chisholms spent more than $23,000 in airfare, hotels, cell phone bills, and fine dining, according to court papers. That same month, Colin paid for his admission into the Knights of Malta with money from Heidecker's piggy bank.
As spring 2013 approached, Lange reached out to Colin with questions about his whereabouts and income over the past nine years. The call that came back wasn't from Colin but his attorney, Thomas Kelly.
Throughout a 40-year career in law, Kelly had made his name defending white-collar criminals, including former Republican Sen. Larry Craig of Idaho, who was busted cruising for gay sex at the Minneapolis-St. Paul International Airport.
On the phone, Kelly explained that any statements in response to the charges would come from his office. The investigators interpreted this as a "no comment" and forwarded their findings to the Hennepin County Attorney's Office.
While reviewing the claims, Kelly became convinced that the best thing for his client was to quickly negotiate a repayment plan and keep his name — and past endeavors — out of the newspapers.
"There's no question he owes people a lot of money across the country," Kelly says. "But that doesn't make him an immoral or evil person. It makes him bad to invest in."
Months passed without any word from the state. Kelly got the impression that charges could be filed in the fall. Anticipation grew. So in September, Colin boarded a plane to California and returned home with $120,000 in $100 bills.
The charge against Colin came down on February 19, 2014 — one count of wrongfully obtaining public assistance over $35,000 — punishable by up to 20 years in jail. In March, Andrea was slapped with the same charge, and the hunt for the couple was on.
Standing before TV cameras, Hennepin County Attorney Mike Freeman mocked the lord and lady of welfare. His manner swung from humorous to indignant as he laid out the merits of the case and vowed that justice would be served.
"These were rich folks ripping off the system," Freeman thundered. "I will make sure they do hard time."
C>olin had spent the winter of 2013 trying to lure Grand Prix auto racing to the Bahamas.
Colin desperately plundered his Rolodex for help. One email he sent to a family friend in Minnesota characterized the recent news reports of his run from the law as "outrageous." Colin conceded that he might be a "sinner" but professed that he was innocent of the present charges. He asked for refuge and concluded by appealing on religious grounds.
"You know how to help us or direct us, thank God."
On March 31, the Chisholms packed their bags one more time and headed for a bus. But before they could board, Bahamian Police officers — who'd been keeping their eye on the apartment — seized the couple's passports. They sent the family back on a ferry to Port Everglades, Florida, where they were immediately arrested. (Their son is in the custody of relatives.)
At his extradition hearing the next day, Colin looked exhausted. A gaggle of reporters gawked as he lurched toward a Broward County courtroom in handcuffs.
"Hey, Colin," a TV journalist taunted, "if you're so wealthy, why did you need to steal all that money?"
Colin lifted his heavy eyelids but kept his head down. The hallway exploded with laughter.
Later, Broward County Judge John "Jay" Hurley halted the proceedings to question whether Colin was fit to continue. He looked ready to pass out in his seat, the flashes of the media cameras illuminating his drained face like a jack-o'-lantern.
"Do you need medical attention?" the broad-faced, avuncular judge asked.
Colin shook his head. After the hearing, he shuffled out of the spotlight, disappearing into a pack of indistinguishable blue jumpsuits.
Later that night, he inched slowly toward the jail phone that allows prisoners and visitors to communicate at the Paul Rein Detention Facility in Pompano Beach.
"Hello?" he asked, in a barely audible whisper to a reporter he'd never met before.
Can you speak about the case? the reporter asked.
Colin shook his head slowly.
"Well, is there anyone close to you who would be willing to speak about your character?" the reporter asked.
Colin stood quietly, lost in thought. Finally, he said: "There's no one left to call."