Tax case opens a window on Delano man

Gary Collyard appears to have come a long way since growing up on St. Paul's East Side. He wears the best suits, drives luxury automobiles and lives in an 8,000-square-foot home on 50 acres in Delano.

But according to court records, some former employees of his Wayzata real estate firm told state authorities that Collyard wasn't all that he seemed.

They said Collyard, 62, was acting as a real estate broker without a license, that he misrepresented himself as a lawyer, and that he sold securities without a license. They pointed to court judgments and settlements exceeding several million dollars showing that Collyard had stiffed banks, business associates and former girlfriends.

And Collyard's former employees told state revenue agents that he didn't appear to be paying his full share of income taxes.

Collyard and his wife, Valeri Lennon, 51, were charged Tuesday in Hennepin County District Court with failing to pay nearly $63,000 in state income taxes; failing to file tax returns; and filing false returns. Collyard faces five counts; Lennon faces four. Each is a felony punishable by up to five years in prison and up to $10,000 in fines.

At their request, an arraignment was postponed until Oct. 18 to give them time to hire an attorney. Assistant County Attorney James Appleby said they were considered flight risks, so a judge ordered them to turn in their passports as a condition of their release.

The couple declined to comment to a reporter after their brief court appearance.

Carolyn Carpentier, 57, of Maple Grove, blames Collyard for the loss of her entire retirement savings. She said in 2005, Collyard presented himself as an experienced real estate broker, developer and attorney who could help her husband and son set up an auto-repair repair shop in an attractive Rogers location. But Collyard failed to live up to his promises, she said, and they dove deep into debt trying to get the business running. Her husband filed for bankruptcy protection in January 2010.

"I have lost my entire retirement -- $230,000," Carpentier said in late 2009. "My husband and son put in three years. It would have been a successful business if they hadn't defrauded us."

Several sources with direct knowledge of the Collyard case said federal authorities are investigating Collyard's activities.

In 1998, Collyard was convicted in federal court for filing fraudulent tax returns, statements or other documents, a misdemeanor. He was sentenced to two years of probation and 200 hours of community service.

Collyard has a connection to a federal investigation underway into the sale of stock in Bixby Energy, a troubled Ramsey, Minn., developer of coal-to-natural-gas technology. Collyard was paid $582,454 in "finders fees" in 2006 and 2007 to help sell $5.8 million in Bixby Energy stock, according to records produced in an unrelated Hennepin County civil suit.

Desender, 65, recently pleaded guilty to securities fraud related to the sale of Bixby stock and awaits sentencing. He implicated an unidentified former Bixby officer in what federal authorities describe as a $60 million securities fraud scheme that allegedly duped investors in a venture to sell coal-gasification technology to China.

Walker resigned from Bixby in May in the face of federal criminal and civil investigations and lawsuits alleging gross mismanagement. Walker, who earlier founded Select Comfort, maker of the Sleep Number Bed, denies any wrongdoing.

Former U.S. Rep. Gil Gutknecht, a Bixby investor who became its board chairman after Walker's ouster, said Tuesday that he doesn't know anything about Collyard. But he said others at Bixby remembered him as "a bad-news guy" and said that Bixby should "get away from this guy. Apparently that didn't scare certain people away."

Ex-employees complained

Jeffrey Slater, a longtime criminal investigator with the Minnesota Department of Revenue, described how the tax investigation of Collyard came about in a sworn statement he filed in 2009 to obtain a search warrant for Collyard's home and four vehicles.

A review of bank records found that Collyard had represented his net worth in the tens of millions of dollars when applying for loans, Slater said. For instance, a loan file from Americana Community Bank in Chanhassen showed that his net worth ranged from $21.8 million to $29.8 million between 2005 and 2008, and that he had current receivables ranging from $2 million to nearly $7 million during that time frame.