A 54-year-old Garrison woman who pleaded guilty to two felony theft charges after nearly $40,000 in gambling funds went missing from the Garrison Fire Department Relief Association’s coffers is asking the court to allow her two months to pay back the full restitution before facing potential jail time.

As part of a plea agreement Shawn Marie Luedtke made in April in the theft case, she agreed to pay back restitution in full or risk 180 days in jail. According to a March 2020 criminal complaint filed after an investigation began in May 2019, Luedtke told investigators she took the money with the intent to pay it back, using it for gambling at the casino.

Luedtke argued $15,000 would cover the organization’s losses and filed an affidavit contesting the $44,458 in restitution ordered by Crow Wing County District Judge Erik J. Askegaard. On Oct. 10, Askegaard granted nearly all of the victim’s damages claims, ordering Luedtke to pay back $37,283 in stolen funds and $7,175 paid to a gambling manager who helped identify the discrepancies in the association’s ledger.

In the order, the judge wrote he did not find Luedtke’s claim she “mentally kept a running track” of the stolen money totaling $15,000 credible, citing a taped interview with an investigator in which she stated she had no idea how much she’d diverted.

Now, the Crow Wing County Attorney’s Office is asking the judge to start the clock by setting a jail report date, should Luedtke fail to pay the restitution. In a filing Wednesday, Luedtke’s public defender Emmett Wells requested the date be Dec. 17, noting Luedtke believed she could make the full payment by then.

Newsletter signup for email alerts

According to the criminal complaint, a gambling manager from another organization noticed discrepancies in May 2019 in the relief association’s account while she helped train a new employee. Over the course of 10 months, amounts ranging from $1,671 up to $7,476 appeared to be missing from the organization’s account. After determining the discrepancies amounted to nearly $40,000, the manager instructed the employee to report the issue to the Crow Wing County Sheriff’s Office.

An investigator interviewed Luedtke, who explained she helped her husband with bookwork and taking pull tab boxes in and out of play when he took over gambling for the fire department. This included those at Green Lantern Bar, one of the largest gambling sites for the association with 45 boxes.

Luedtke admitted to the thefts, according to law enforcement, stating when she removed two pull tab boxes, she kept the money from one but still entered those boxes into the system, despite the money not being deposited. She was the only one viewing bank statements, she said, so no one else noticed. Despite stated intentions to pay the money back, Luedtke said “it got out of hand” and she did not return any of the stolen funds before the discrepancies came to light.

As part of Askegaard’s restitution order, the judge noted the Minnesota Gambling Control Board fined the association $2,697.83 for not having the appropriate checks and balances in place to prevent embezzlement. Askegaard did not find Luedtke responsible for paying the association back for this fine, however.

“Defendant did not cause this loss; but rather, Defendant’s actions caused the Gambling Control Board to become aware of the deficiencies in the victim’s ‘checks and balances processes’, and that is why the fine was assessed,” the judge wrote.

According to the Gambling Control Board, the Garrison Fire Department Relief Association earned a one-star rating during fiscal year 2019 — which primarily occurred before the thefts — meaning it spent less than 20% of its annual gross profits on lawful purpose expenditures. Lawful purpose expenditures include charitable contributions, payments to local units of government and lawful gambling taxes. Of the $853,862 in gross receipts, total expenditures for the association were $38,055, or 19.1%.

Two-star and one-star ratings are grounds for a one-year automatic probation period, meaning the organization must increase its lawful expenditures to a minimum of 30% or be subject to sanctions. Legislation passed last year waived the star rating requirement for fiscal year 2020, citing significant disruption due to the pandemic. For those organizations on probation, the legislation also extended the probationary period by one year or sooner if issues are resolved before the extended period.