Updated: August 25, 2019 10:11 PM
Sources told 5 EYEWITNESS NEWS the Grand Avenue Business Association, GABA, is now under a federal investigation involving the U.S. Attorney, Secret Service and IRS.
GABA's biggest yearly event is St. Paul's Grand Old Day, in June, and that's where sources said the investigation started after the festival was abruptly canceled in April and then saved at the last minute by donations from local businesses.
Sources said St. Paul Police started the investigation in May, they then turned over significant evidence in July to the U.S. Attorney's Office for Minnesota.
The Secret Service, a division of the Department of Homeland Security, handles financial crimes as does the IRS which is also involved, according to sources, because GABA is a non-profit organization.
Sources said the investigation is primarily focused on GABA's spending during the years 2014 through 2018 when the organization started losing tens of thousands of dollars which prompted the initial cancellation of Grand Old Day.
Shortly after GABA announced it could not afford to host Grand Old Day, in April, GABA's Executive Director and President both left the organization and a new board, with new leadership, took over.
Bob Lawrence became GABA's President in January and he confirmed, to KSTP, there is a federal investigation underway but could not comment on any specifics.
"After St. Paul Police did an audit, for reasons I do not know, they turned over the case to the federal government," said Lawrence. "I really do not know anything more than that right now."
Lawrence said he could not determine how much money the federal government might be looking at as possible embezzlement, or financial improprieties, regarding past board members and staff employees.
"I do not know who they've (investigators) talked to at this point," said Lawrence. "And, I do not know how much money we are talking about but there is no doubt that is what they are looking at right now."
Sources told KSTP up to six GABA Board members, in January 2016, spent a night at Mystic Lake Casino, some with their spouses, and billed GABA $3,000 for the casino visit.
Sources said in February 2016, less than a month after the Mystic Lake trip, GABA paid $200 for a staff member to fly to Las Vegas, but it is unclear what type of GABA business was being conducted in Las Vegas at the time.
Those same sources said, in 2015 and 2016, there were more than $5,000 in "happy hour" expenses--each year--for board members which were also paid by GABA.
And, sources said, a former staff employee manipulated GABA's financial books so the employee could receive an extra bonus payment which was not approved by the board and totaled more than $4,000.
Lawrence said Grand Old Day "did very well financially in 2019" and GABA is moving forward with plans to continue the popular event in 2020 which attracted more than 200,000 people in recent years.
"We are in a better place than we've been in the past eight years," said Lawrence. "Grand Old Day is great for Grand Avenue and St. Paul and, right now, we are planning on a great year in June of 2020."
The U.S Attorney's Office and the St. Paul Police Department will not confirm, or deny, there is an active investigation. But, sources said the case is "close to being wrapped up" and there could be possible criminal charges filed within the next 30 days.
Sources said none of the current board members, or any staff at GABA, is under investigation and that it "involves people directly involved with the group's finances between 2014 and 2018."
Updated: August 25, 2019 10:11 PM
Published: August 25, 2019 12:00 AM
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