Report: UMD fund-raiser siphoned profits

MINNEAPOLIS (AP) — The head of a University of Minnesota-Duluth athletic booster club diverted profits from charitable gambling to his own business, according to a report published Thursday.
The copyright story in the Star Tribune also said a UMD Athletic Department fund-raising employee, Fred Burnes, helped hide the diversion from auditors.
According to the newspaper, a state investigation last year determined that Ken Holmstrand, founder and executive director of the Cloquet Connection booster club, diverted club pull tab profits to his firm, Voyageur Marketing Services.
Holmstrand then altered check carbons and monthly reports to make it appear that UMD athletics and other charities received the checks, according to the investigation summary.
Holmstrand denied any wrongdoing.
“None of this went into my left hip pocket,” he told the Star Tribune. But he acknowledged that he did profit from passing charitable gambling donations through his company.
UMD officials told the Star Tribune the school did not receive thousands of dollars in donations that the Cloquet Connection reported as donations to the school on state forms.
When presented with the state’s evidence, Carlton County Attorney Marvin Ketola declined to file criminal charges against Holmstrand, according to the summary written by Minnesota Department of Public Safety investigator Patrick Shannon and sent to the state Gambling Control Board.
Shannon, a special agent with the state’s gambling enforcement division, wrote that Ketola “felt there was no fraud involved” because Holmstrand eventually provided the charities with donations in the form of fund-raising merchandise, such as “rally hankies” and T-shirts, which he sells through Voyageur.
The Star Tribune stated it also found that Cloquet Connection officials used photocopies of a form with Burnes’ signature to tap the club’s gambling accounts in UMD’s name for some of the money UMD says it never received.