A federal judge Monday dismissed a felony fraud charge against former University tutor Jan Gangelhoff, rejecting a plea agreement that called for her to testify against former University officials.
U.S. District Court Judge Paul Magnuson tossed out the agreement, saying it was too broad and restricted his rights as a judge and Gangelhoff’s rights as a citizen.
Gangelhoff had been charged with one count of misappropriating federal Pell Grant funds for a basketball player during the 1995-96 school year. She was expected to plead guilty on that count and testify against former men’s basketball coach Clem Haskins and former academic counselor Alonzo Newby in exchange for leniency in sentencing.
However, Monday’s dismissal marked an unexpected turn of events.
Joseph Daly, a Hamline University law professor who attended the hearing, said, “She was to be the star witness (in the federal case). Now she doesn’t have to cooperate unless recharged.”
“If I were Clem Haskins and Alonzo Newby, I’d be very happy about this,” he said.
Prosecutors could recharge Gangelhoff or work out another plea agreement in the future but, for the time being, “she’s like you and me — a free citizen,” Daly said.
Federal prosecutors would not comment on the case following the hearing.
“(Prosecutors) will have to totally rethink whether to bring another charge or whether they have a case,” Daly said.
During the hearing, Magnuson admonished the prosecution for leaks to the news media related to the grand jury investigation.
“(The judge) made it clear, there are a lot of potentially innocent people that are being hurt by this information being tossed around,” Daly said.
Gangelhoff and her attorney, Jim Lord, declined comment as they exited the courthouse.
Haskins’ attorney, Ron Meshbesher, said of Monday’s developments, “This is definitely a strange turn of events. It puts the ball back in the prosecutors court.”
Meshbesher maintained that he feels optimistic his client will not be charged in the federal case.
Ron Rosenbaum, Newby’s attorney, expressed similar sentiments.
“The case, to the extent there is a case, has been based on Jan Gangelhoff talking to the newspapers,” he said.
University Associate General Counsel Lorie Gildea, who is handling the University’s lawsuit against Haskins to reclaim a portion of his $1.5 million contract buyout, said the dismissal does not affect the status of the civil litigation.
The lawsuit is completely independent of the federal investigation, she said.
However, Daly said the dismissal might have an impact on the attempt to recover the money.
“This case is in a lot of trouble from the perspective of the federal government and the University of Minnesota,” he said.

— Staff Reporter Mike Oakes contributed to this report

Todd Milbourn welcomes comments at [email protected]. He can also be reached at (612) 627-4070 x3234.