A Minnesota state audit found that dozens of police departments were double billed for standard items such as spotlights and heated mirrors that were to be included in squad car purchases.
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A television media investigation exposed the scandal, which led to more than $800,000 to be refunded to more than 200 police departments across the state. The vehicles were sold from Nelson Auto Center, a car dealership located in Fergus Falls, Minn., that contracted with the state.
The audit found taxpayers were overcharged on 3,225 vehicles on sales dating back to 2010.
“We went through line item by line item and so that was pretty painstaking,” said Minnesota Department of Administration Assistant Commissioner Curt Yoakum. “Obviously the biggest surprise was that someone had the audacity to try overcharging law enforcement.”
Gerry Worner, Nelson Auto’s former fleet manager, was charged in July with five counts of theft by swindle. Worner denies the charges.
The auto company’s owners are not facing charges and say they were not aware there were any overcharges. Despite the company’s corporation with investigators, the Minnesota Department of Administration stripped Nelson Auto of its $15 million-a-year contract to sell Ford SUV’s to law enforcement agencies.
The investigation also revealed problems with the oversight of purchases made through state contracts, with records showing the Department of Administration and the Department of Public Safety failing to investigate accusations from a whistleblower and overage reports
Matt Massman, commissioner of the Minnesota Department of Administration, said in response his office has initiated new fraud prevention policies including hiring a compliance expert to review other state contracts.
“We want to make sure we’re putting the resources on it to get this right – and frankly to deter any potential vendor from doing something similar on another state contract,” Massman said.
The whistleblower, a private citizen with both a law enforcement and vehicle purchasing background, shared the tip with reporters in March 2017. He said back in 2015 he discovered the St. Paul Police Department had been overcharged for spotlights and heated mirrors on some of their squad cars.
With the information, St. Paul officials demanded a refund and Nelson Auto cut a check paying back more than $13,000.
Suspecting other departments might have also been overcharged, the whistleblower provided the information to the state agency which oversees the contract. Two years later, with the state agency sill not pursuing the case, the whistleblower contacted the media.
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