Deephaven woman who lived in mansion, owned yacht pleads guilty to welfare fraud

Deephaven resident Andrea Chisholm, who with her husband was charged with illegally receiving welfare and other benefits while living in a mansion and owning a yacht, pleaded guilty Tuesday and was sentenced to a year behind bars.

The sentence was part of a plea agreement that guaranteed jail time for Chisholm because the fraud was considered a major economic offense. Without it, her presumptive sentence would have been probation. A felony charge of theft by swindle was dismissed.

Hennepin County District Judge Lois Conroy also ordered Chisholm and her husband, Colin, to pay $167,420 in restitution. During the hearing, Andrea Chisholm admitted to receiving more than $60,000 in welfare benefits and said she will challenge the judge's amount at a future hearing.

"It's appropriate that Andrea Chisholm spend time behind bars for cheating the public of welfare dollars," County Attorney Mike Freeman said. "Her husband's case remains open, as it appears he was a bigger player in defrauding the public as we heard in Andrea's testimony today."

Colin Chisholm appears to be heading toward a trial. He recently discharged his attorney and was appointed a public defender. His next appearance will be Sept. 10.

Andrea Chisholm was given credit for serving nearly five months in jail since her arrest in March. She will serve another three months and then will be placed on supervised probation.

The Chisholms were arrested in March after fleeing Minnesota for the Bahamas and charged with making $167,420 in fraudulent medical and food-stamp claims in Florida and Minnesota from 2005 to 2012. At times, they rented a $1.6 million home on Lake Minnetonka and owned a yacht.

The couple, who once referred to themselves as Scottish nobility, "Lord and Lady Chisholm," claimed to have $97 million in assets and tried to start a satellite television network in the Caribbean.

In March 2012, the Chisholms' benefits were finally cut off when they couldn't explain how they were able to pay their rent and personal expenses with no income. The couple had more than $3 million in bank accounts while they were receiving welfare payments, authorities said.

Colleagues and friends helped police track down the couple in the Bahamas.

In court, Andrea Chisholm admitted authorizing various welfare benefit applications filled out by her husband. She also said she falsely answered questions about bank accounts, employment and residences. Her attorney asked if she noticed some red flags raised that may have hinted at illegal behavior. She answered, "I do now."

David Chanen • 612-673-4465