Colin Chisholm sentenced to prison for welfare fraud while living on a yacht


Colin Chisholm III was sentenced to 21-months in prison Monday morning, bringing to an end one of the most elaborate welfare fraud cases ever prosecuted in Hennepin County.

Chisholm, 63, along with his wife, Andrea, 54, fraudulently obtained nearly $168,000 in food, cash and medical care while living first on a $1.2 million yacht in Florida and later in a lakeside home in Deephaven. They were also ordered to pay back the money, although their lawyers have indicated they will fight the amount of restitution.

“This is a fitting end to a crime that never should have occurred,” Hennepin County Attorney Mike Freeman said after the sentencing. “We are pleased with the sentence and believe it is one of the longest ever given in the state of Minnesota for welfare fraud. I am proud of the hard work in the investigation of the crime. It was not easy.  The amount and level of the evidence meant that both Colin Chisholm and his wife, Andrea, who pled guilty earlier, had no choice but to plead guilty.”

Beginning in late 2004 and continuing into 2012, the Chisholms filled out more than a dozen forms for the state of Minnesota and Hennepin County in order to receive welfare assistance. Each time they lied about where they were living, whom they were living with and the fact that Colin Chisholm was the chief executive officer of TCN Network which purported to be a satellite television and broadband service for countries throughout the Caribbean. More than $1 million flowed through accounts he controlled as part of that company. In addition, Andrea owned a successful dog kennel in the Twin Cities that bred and sold championship dogs.

Under Minnesota Sentencing Guidelines, both Chisholms would have been expected to receive a sentence of probation. However, because this was a major economic crime and particularly egregious, Freeman asked for prison time for both as part of their guilty pleas. Hennepin County District Court Judge Lois Conroy agreed to the prison sentences.

“We don’t find a lot of cases in which there are large dollar amounts of welfare fraud,” Freeman said. “When we do and they are egregious, we have a history of asking for, and being granted, upward departures.”

Interestingly, Chisholm continued to lie about his involvement even after his guilty plea. In his interview with a probation officer who was compiling the pre-sentence investigation, he said they first applied for welfare when they returned from Florida in the spring of 2007, assistant Hennepin County attorney John Halla told the judge. In fact, they had been receiving Minnesota benefits since early 2005.

In addition, he made it sound as though it was his mother-in-law’s fault because she suggested he apply for unemployment and a Hennepin County employee’s fault for saying he didn’t qualify for unemployment but might qualify for medical assistance. Chisholm said being told he qualified, “was the worst thing to ever happen,” Chisholm was quoted as telling the probation officer.

“Your honor, his passive phrases suggest that the defendant views himself as some sort of unlucky bystander,” Halla said.

When Judge Conroy asked Chisholm if he wanted to speak, he paused for a long moment and then said he did not.

“You have an opportunity to turn your life around,” Judge Conroy told him. “For yourself, for your family and for society, I hope you choose to do so.”