Steve Chicoine: Exonerated, at long last
Not everyone charged with white-collar crime is found guilty. Witness the trials of Steve Chicoine.
By DAVID PHELPS, Star Tribune
Last update: February 2, 2009 - 6:58 AM
startribune.com
It was a Wednesday morning in August 2002. Steve Chicoine, the president of Edina-based Interlink Communications Corp., was on the phone talking to the company's lawyer when a group of federal agents walked into his office and told him to hang up.
The agents had a search warrant and were looking for evidence that Interlink, which sold computer networking equipment from Cisco Systems, had bilked Cisco out of $1 million with phony invoices to replace purportedly faulty parts.
Thus began a six-year ordeal for Chicoine, 58, that cost him jobs, money and respect.
Today he is a free man, exonerated in December by a federal jury in California.
"It was a huge release, both physically and psychologically," Chicoine said in a recent interview. "But I know I'm still tainted."
Chicoine's ordeal ended quietly, even as public attention was fixated on the allegedly criminal acts of Tom Petters and Bernie Madoff and a seeming host of others. Some involved in those schemes have already pleaded guilty, and many have yet to stand trial. If anything, Chicoine's case is a cautionary reminder that not every suspect charged with a white-collar crime will be found guilty.
Chicoine is an engineer who worked in the oil and gas industry in Texas before he moved to Minnesota to work with family members at Interlink, a company in which he had been a financial backer and silent partner.
He arrived in 2001 at a time when Interlink was doing $10 million to $15 million, buying and selling new and used Cisco equipment.
"I thought Minnesota would be a great place to raise a family," said the father of two. "Interlink had a good business plan, and I was looking to grow the company through partnerships with Cisco and other tech companies."
But unbeknown to Chicoine, others in his company had been turning a profit by sending false invoices to Cisco to get replacement parts that weren't needed, which they then would sell at higher prices to other companies.
"I'm in a business I don't know," Chicoine recalled. "I had no clue."
In early 2002, Chicoine got a call from another Interlink business partner and was told that a former Interlink employee had been talking to Cisco about the fraudulent billing activity. Chicoine said the caller made a chilling prediction: "You've got big problems coming down on you."
Chicoine said he took his cousin Mark Faris, Interlink's vice president, to meet with the company's lawyer, Mark McNeil, at McNeil's Lindquist & Vennum office in downtown Minneapolis. They agreed the practice had to stop.
"I thought this would be a contractual issue that we would settle with Cisco, maybe write a check and move on," Chicoine said.
But it would get worse beyond Chicoine's wildest imagination.
In late July, the ex-employee who reportedly had been talking to Cisco about the alleged fraud called an Interlink executive and said, "The government is coming in."
"So we waited," Chicoine said, until that fateful Wednesday morning when about 30 FBI agents and postal inspectors gathered more than 100 boxes of evidence and interviewed everyone except Chicoine and Faris.
"We knew who the targets were," said Chicoine, referring to himself and his cousin.
That was basically the beginning of the end of Interlink. It eventually folded into another tech-ware company, Zycko. Chicoine sold his 30 percent interest at a fraction of his original investment. He went a year without work. And he also went the next four years with little word from the government.
In the interim, Chicoine went to work for a faith-based nonprofit organization in north Minneapolis at a fraction of his former income. His wife found work in St. Paul as a certified public accountant.
Then came the fateful winter day in 2007 when Chicoine, Faris and two other Interlink employees were indicted by a federal grand jury in California -- Cicso's home base -- on charges of mail and wire fraud, conspiracy to commit money laundering and aiding and abetting a crime.
"After the raid in 2002 I was in shock. Then were was some normalcy. But then I was arrested and it was a crushing blow," Chicoine said.
He was immediately fired from his nonprofit job.
Chicoine hired white-collar defense attorney William Michael of Dorsey & Whitney. Together, they assembled a defense plan. Chicoine would testify that he had no knowledge of the fraudulent activity and that when he did learn about it he sought legal help and ordered a halt to the practice of filing false invoices.
His stress mounted.
"I had a 12- and a 7-year-old, and they were cognizant that dad might go to jail," Chicoine said. "I tried to keep the tension off the family the best I could, but I was human."
Another year passed before the trial.
"At one point the trial date was postponed because one of the postal inspectors was expecting twins. I thought, 'Nobody cares about my kids,'" Chicoine said.
In September, three months before the scheduled trial in San Jose, Chicoine collapsed in a Cub food store and was hospitalized for two days with a diagnosis of vertigo. He believes it was stress-related.
The trial finally began Dec. 8. The government's case centered around the testimony of Interlink employees named in the indictment. Charges had been dropped against one of the three, and the other two had already pleaded guilty in an agreement with the U.S. Attorney's office requiring them to testify at Chicoine's trial.
Their testimony proved inconclusive. Michael, Chicoine's attorney, said one testified that he had "no idea" if Chicoine knew of the phony invoices. Another said she "thought she knew" that Chicoine had knowledge. A third said he "believed" Chicoine was aware of the fraud. Another couldn't recall the 2002 visit to Lindquist & Vennum, which had led to the end of the alleged scheme.
"There was no question that Cisco was defrauded. The question was whether or not Steve was involved. Steve was not involved," Michael said. "Mere knowledge [of a crime] isn't enough to prove a conspiracy."
Michael decided not to put Chicoine on the witness stand and called just two witnesses, one of whom was Mark McNeil -- the lawyer Chicoine sought for counsel six years earlier after learning of the scheme.
"I was asked if I considered Steve to be an honest man and I gave the most affirmative answer I could," McNeil said. "It's against his constitution to engage in fraud."
After eight days of testimony, the jury of 11 women and one man deliberated for just 3 1/2 hours before reaching a verdict. The jurors, who had assiduously avoided eye contact with Chicoine during the trial, looked directly at him as they delivered their verdicts. As the not-guilty verdicts were read, Chicoine said he looked at each juror and mouthed the words, "Thank you, thank you, thank you."
The U.S. Attorney's office for the Northern District of California declined to comment on the verdict. It said the case was complicated, with a large volume of evidence.
Chicoine, who paid what he terms "a king's ransom" in legal fees, remains unemployed. He volunteers at Source Ministries in south Minneapolis and studies history. He's putting the tribulations behind him.
"The fact that my family is still together is very important to me," Chicoine said. "The joy of being exonerated is still with me. I learned a lot about life. I think I'm a better person. But I wouldn't want to go through that crucible again."
But Michael asks the rhetorical question often repeated about those found not guilty. "Where does he go to get his reputation back?"
David Phelps • 612-673-7269
startribune.com |
