A Friend in Need
Marianne Brandt's death came as no surprise to anyone. Since suffering a heart attack in 1994, she had seen her health spiral steadily downward. By the time the end came, she had been forced to move into a nursing home.
On the day Brandt died, her sister, Kathleen Kelly, returned to her home in Forest Lake to find a large envelope in the mailbox. Because of Brandt's weakened state, Kelly had recently taken over responsibility for her sister's legal affairs. Most significantly, she was trying to determine what had become of a disability claim filed by Brandt in 1998 that, as far as she knew, had never been settled. Brandt had left her job as an executive assistant with the Minnesota Elementary School Principals' Association in 1998 because she was too weak to continue performing her duties, but the insurance company refused to pay her disability benefits. For the last five years of Brandt's life, her only income was a Social Security check.
Brandt had hired an attorney, Stephen Rondestvedt, to fight the insurance company's decision, but after more than five years she still hadn't seen a dime. "I'm sure my sister just kind of gave up on it," Kelly says. "She was weak and spent most of her time doing nothing. She was just tired."
Kelly had recently requested copies of all documents related to her sister's claim from Rondestvedt. So she assumed that the bulging envelope in her mailbox was the case file. "I thought, my goodness, he got right on it," she recalls.
Instead, what Kelly discovered in the mailbox was a package from the Office of Lawyers Professional Responsibility, a statewide organization that is charged with disciplining unscrupulous attorneys. A letter inside the envelope informed her that Rondestvedt had been disbarred and was facing possible criminal charges.
Kelly eventually determined that her sister's disability claim had been settled more than two years earlier, for just $10,000. Rondestvedt had forged Brandt's signature, cashed the check, and simply kept the money for himself. "It diverted my sorrow into a little anger," Kelly says.
Kelly was far from the only person receiving a package from the Office of Lawyers Professional Responsibility that week. The organization mailed out many such letters to Rondestvedt's clients. All told, according to files compiled by the Client Security Board and the Office of Lawyers Professional Responsibility, over a four-year period, the 40-year-old, married father of three stole almost a million dollars from his clients. The thefts, stemming from personal injury cases, ranged from $3,000 to more than $100,000.
The Minnesota Client Security Board, a trust set up by the state bar association to compensate people who have been defrauded by lawyers, has so far paid out $746,000 in claims to 22 people--the greatest sum spent on any single case since the board was established in 1988. In fact, the previous record for an entire year of claims was $705,524, doled out in 1996. There are still three complaints against Rondestvedt that have not yet been resolved.
What's most striking about the Rondestvedt case is that, like Brandt, most of the people that the scofflaw attorney stole money from were poor and disabled. Some had known Rondestvedt for years and relied on him for personal advice and financial counsel. He asked after their children and pets, socialized with them in bars and restaurants. One former client, Clark Zaccardi, had even asked Rondestvedt to be the best man in his upcoming wedding.
"My whole family knows Steve personally," says Zaccardi, whose parents were swindled out of about $75,000 by Rondestvedt. "Steve always pretended that my mom was his mom. He called my dad 'Dad.'"
According to the United States District Attorney's Office, which is prosecuting the case, Rondestvedt pumped at least $200,000 of the money into his Lynnhurst-neighborhood home just off Lake Harriet. He often boasted about his frequent trips to Paris and always insisted on picking up dinner tabs.
He funded his lavish lifestyle off the usually meager disability settlements of folks who in many cases had trouble putting food on their own tables.
Mike Sohrweide, for example, was taken for $94,000. In a form filled out for the Client Security Board last fall, Sohrweide succinctly detailed his fiscal and psychological state. "Besides the money, deeper depression than before," he wrote. "Can't finish associates degree, may lose truck, home & land."
John Eric Love was duped out of $14,287. "I needed the money desperately," he wrote to the Client Security Board. "Because of my back injury and chronic pain I am unable to work 40 hours per week. I'm only working part time. I cannot live on air! I have 3 children."
The lawyer's crimes are not completely without precedent. In 1999, Minneapolis attorney David Moskal was sentenced to five years in federal prison after pleading guilty to three counts of mail fraud stemming from thefts of nearly $2.5 million from his clients. He too practiced personal injury law and preyed on vulnerable adults. "The parallels are striking," says Assistant U.S. Attorney Hank Shea, who prosecuted both cases. "It's a question of greed combined with the arrogance that you're not going to get caught." (Funds from the Client Security Board were not tapped in Moskal's case, because his former law firm, Schwebel, Goetz & Sieben, compensated the victims.)
Rondestvedt was indicted and pled guilty to two counts of mail fraud in October, but is still awaiting sentencing. According to the plea agreement, he is facing between 37 and 57 months of federal prison time. At present, however, he remains a free man, a fact that angers some of his victims. Terreea Kilgo-Callender was taken for at least $9,500 by Rondestvedt. "I'm sorry," she says, "but if the man had been black, his butt would have been in jail by now."
The details of Rondestvedt's scams are as pathetic as they are appalling. His machinations were so recklessly simplistic that someone was bound to catch on eventually. "I think it's like a drunk who keeps drinking and they actually want to get caught," posits Karl Von Reuter, one of Rondestvedt's former law partners. "He was relieved when he was finally caught. He couldn't take it anymore. Mentally, he was struggling very badly."
As detailed in public records, there were two basic ways that Rondestvedt defrauded his clients. In many instances he simply reached a settlement with the insurance company, forged his client's signature on the check, and pocketed the money. He'd then make up endless stories to explain why the client's claim had not yet been settled.
Terreea Kilgo-Callender, for instance, was in a car accident in May of 2000 that left her with broken bones in her left hand and two tears in her rotator cuff. "When it gets cold, it still hurts," she says, massaging her left hand while seated at a table in her mom's St. Louis Park home. Following the accident, Kilgo-Callender was forced to leave her $21-an-hour job of eight years as a guard at the state prison in Lino Lakes. She ended up selling her home and moving in with her mom in order to make ends meet.
In May of 2000 she hired Rondestvedt to pursue a personal injury claim against the prison's insurance company. Unbeknownst to her, the matter was settled less than a year later for just $9,500. Rondestvedt forged her name on the check and pocketed the money.
Over the following months, the lawyer repeatedly assured Kilgo-Callender that he was still pursuing the matter. In fact, in July of last year--more than two years after he'd settled her claim--Rondestvedt showed up at her workplace at 7:30 one morning to pick up some papers related to her case. "Cool, calm, charming," is how she describes his demeanor that morning. "Same as he always was. He's a personable person is what he is. It's easy to put your trust in him."
Kilgo-Callender was reimbursed the $9,500 by the Client Security Board. But she insists that she never would have settled for that paltry amount of money and that it doesn't begin to cover the financial losses she's incurred as a result of the car accident. "I was secure in my job," she sighs. "I made good money. I could take care of myself. The day I found this out my blood pressure just skyrocketed."
She's now hired another attorney to try to reopen the case with the insurance company. "I suspect that they'll resist and we'll have to start a lawsuit," says Paul Downes, her current lawyer. A lawsuit against Rondestvedt would likely prove futile: Creditors are now scavenging what remains of his assets, including his $400,000 home.
Kilgo-Callender is dubious that Rondestvedt will be punished sufficiently for his misdeeds. "It's a white-collar crime," she notes. "He ain't gonna do no time." She then adds, only half-joking: "I'd like him to do some time, because I know some people in prison."
As in Kilgo-Callender's case, trust was often an integral part of Rondestvedt's scams. This was particularly true for the other main means by which he defrauded clients: fake investment vehicles. In at least 13 cases, Rondestvedt convinced clients to invest their disability settlements in high-yield annuities or certificates of deposit that did not exist. In some instances, Rondestvedt even went so far as to create bogus financial documents in order to convince people that the investment schemes that he was peddling were for real. Several duped investors actually received dividend checks from Rondestvedt. But it was essentially a Ponzi scheme in which one client's account was raided to pay off another client.
"A lot of these people are very vulnerable," notes Ken Jorgensen, director of the Client Security Board and the Office of Lawyers Professional Responsibility. "I guess they were fairly trusting."
Douglas Niccum, for instance, hired Rondestvedt in December 2002 to resolve a workers' compensation claim stemming from a back injury while working for the city of Shoreview. The attorney came highly recommended from a close friend. In April 2003, the claim was settled for $105,000, with Rondestvedt taking $13,000 off the top for his services.
Rondestvedt then convinced Niccum to invest the funds in an annuity that would supposedly provide regular payments. According to a letter written to the Client Security Board by Sue Niccum, Douglas's wife, Rondestvedt promised the couple that they would receive 18 payments of $9,470 each over a nine-year period, for a total of $170,460--or some $65,000 more than they would have collected by simply cashing the settlement check.
There were immediate red flags, however. The first payment that they received was from Rondestvedt's personal checking account. It bounced. "Because he had been a good friend of a friend of ours, we tried to have faith and believe it was an honest mistake," Sue wrote to the Client Security Board. Then Rondestvedt failed to deliver on repeated promises to send them the paperwork related to the settlement and the fictitious investment scheme. His office voice-mail box was always full when they tried to call. "Then his cell phone was shut off, and I just knew we were in deep trouble," Sue wrote. After calling frantically around to various government agencies, they eventually discovered that Rondestvedt had been disbarred.
"[It] has been very painful," Sue wrote of the experience. "My husband had a heart attack a few months ago and I fear for his health. He feels like a fool, and I can't convince him otherwise."
Douglas Niccum's own assessment of the situation is even more stark. "I am behind on my bills," he wrote to the Client Security Board in the fall. "The hospital is after me for money and my credit card companies also.... I was in the hospital approximately 4 months ago with a heart attack (3rd) and I do not have money to get my pills. This does not help. My stress level is really high. I am about to have a nervous breakdown. My blood pressure is up and not so good. I don't feel good and cannot think at all with all the bill collectors calling me."
It is impossible to say exactly what led Rondestvedt to defraud people like Douglas Niccum. Attempts to reach the disbarred attorney were unsuccessful. Phone numbers and an e-mail address listed in files maintained by the Client Security Board are no longer functioning. No one answered the door in two visits to his Lynnhurst neighborhood home.
Rondestvedt's attorney, Thomas Shiah, says that he doesn't want his client talking to the media, at least until after he's sentenced. "It's not the type of thing that's going to warm the cockles of the public [heart]," he allows.
Rondestvedt earned his law degree from Hamline University in 1988, but none of his professors who remain at the school seem to remember him. In the mid-'90s he was part of the personal injury law firm Meuser Rondestvedt & Batchelor. After the firm disbanded in 2000, he ventured into solo practice. According to Rondestvedt's plea agreement, he began defrauding clients around August of 2000. The deceptions continued, rapidly escalating in severity, until last fall, when he hired a lawyer and called up the U.S. Attorney's office to confess. "We basically self-reported," says Shiah. "We went to the government and said, 'Here's the scoop.'"
Ken Jorgensen of the Client Security Board posits that Rondestvedt may have been hoping that a major windfall from a personal injury lawsuit would bail him out. "Some people do this with the lottery," he notes. "'Sooner or later, I'm going to hit here.' The problem is the longer you keep doing this, the bigger the hole you need to fill becomes. I think that's obviously what happened to him. He didn't have the cash flow to keep it up anymore."
People who have known Rondestvedt for an extended period of time universally claim to be shocked by his actions. "Stunned disbelief," is how James Batchelor, who practiced law with Rondestvedt in the mid-'90s, describes his reaction to the indictment. "Talk to any defense attorney who worked with him, any person who knew him in his day-to-day life, and they'll all tell you the same thing: No flipping way is he capable of this. It's still shocking to me."
Batchelor and others describe Rondestvedt as a devoted father of three daughters and avid athlete. He often competes in 10K runs and triathlons, and has been an instructor at Buck Hill Ski Resort. "Steve was a friend of mine, and right now my guess is he doesn't have too many friends," Batchelor says. "I can't ever condone what he did. I can't excuse it, but at the same time I'm not going to walk away from the guy."
The most obvious harbingers of a life running off the rails--drugs, booze, gambling--don't seem to have figured in Rondestvedt's downfall. "I know that Steve would have an occasional cocktail with co-workers, but he always went home early to his family," says Kelly Brewbaker, who worked for Rondestvedt as a paralegal and remains a friend.
The disgraced attorney is an active member of Lake of the Isles Lutheran Church. In fact, he confessed his crimes to the Rev. Henry French prior to coming clean with the authorities. In a letter written to Judge John Tunheim, who is presiding over Rondestvedt's case, Reverend French pleaded for leniency. "My immediate concern for Steve is that a long prison sentence will do irreversible damage to an already severely damaged marital relationship and a strained parental relationship with his three young daughters," he wrote.
The only logical explanation for Rondestvedt's crimes is greed. Karl Von Reuter, another onetime law partner, believes that Rondestvedt was simply incapable of dealing responsibly with money. "He likes his trips to France," says Von Reuter. "He wanted to impress people with his nice south Minneapolis house, and he didn't know how to live within his means."
Former clients of Rondestvedt's paint a less forgiving picture. Several members of Clark Zaccardi's family were duped by the attorney's con game. He originally met Rondestvedt when the attorney took over Zaccardi's personal injury case. In 1991 Zaccardi had injured his back while working at a bakery. Even after multiple surgeries, he was unable to return to work. That case was originally settled in 1995 for $102,000, with Rondestvedt keeping $13,000 in attorney's fees.
But when Zaccardi's physical condition continued to deteriorate, he again employed Rondestvedt to attempt to reopen the case and get more money out of the insurance company. By this time, according to Zaccardi, the two had become friends. When Rondestvedt relocated to a new office in downtown Minneapolis after his firm disbanded, Zaccardi helped him move. He performed odd jobs on the attorney's $400,000 home, such as rebuilding the windows and maintaining the yard. He even attended a dance recital in which one of Rondestvedt's daughters performed.
"I've met Steve in every strip club in the city," Zaccardi says over coffee at a Perkins restaurant in Cottage Grove on Memorial Day. The unemployed 39-year-old Newport resident speaks with a manic intensity, drawing stares from the surrounding patrons and staff. "When I had nobody else in the world, he was there. And I trusted him."
This close relationship led Zaccardi to recommend that his father also hire the lawyer. In January 2002, Robert Zaccardi hired Rondestvedt to handle a workmen's compensation claim. The case was settled almost immediately, with Robert receiving $101,223 after attorney fees were subtracted.
But as with other clients that Rondestvedt exploited, he convinced Robert Zaccardi and his wife, Myrna, to invest the money in an annuity that would supposedly earn them a high rate of interest. Clark says that he encouraged his parents to take the deal. "I told my mom I trusted him with everything," he recalls. "I trusted him with my soul." Instead of investing the settlement money in an annuity, however, Rondestvedt deposited the money in his own bank account. He also falsely informed the couple that he'd used the funds to pay off $4,914 in state and federal taxes that they owed.
The elder Zaccardis were ultimately conned out of at least $71,000. Although they recovered that money through the Client Security Board, Clark says that the psychological and physical damage done to his parents is permanent. "My parents finally got their money back, but their lives are still ruined," he notes. "How dare him? How dare him?" Since Rondestvedt's duplicity was revealed, Clark says, his father has battled depression and his mother was hospitalized with heart problems. "I swear he took years off my mother's life," he says. (The elder Zaccardis declined to comment for this story.)
Clark is uncertain what exactly became of his own case. The entire ordeal has left him shaken. He has not filed a claim with the Client Security Board. He says that his medical bills and other debts are so out of control that he can't even get a prescription filled. His marriage, at which Rondestvedt was to be the best man, has been put off indefinitely. "I can't trust anybody," he says. "I can't even trust my fiancée because of what he did to me."
Zaccardi is racked with guilt over unwittingly helping Rondestvedt dupe his parents. And he feels ridiculously naive for not having seen through the charming facade. "You know that phrase, a fool and his money are easily parted?" Zaccardi sighs. "That's me."
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