Sand Scheme: La Crosse mine company says it's a victim of million dollar fraud
Eau Claire Co. (WQOW) - Lawsuits, allegations of fraud, complaints from residents and a 200,000-ton pile of sand that hasn't moved in months...all of it concerning one mine in Eau Claire County. WQOW News 18 has learned about an alleged scheme to the tune of $4.2 million and has obtained documents that spell out the allegations line by line.
Five Star Properties, out of La Crosse, started mining sand in the Town of Bridge Creek, near Augusta, last year. The company owners claim they reached an agreement with Michael Timmerman, who they believed represented Cardinal Glass Industries. Five Star would mine 200,000 tons of sand to be sent to Cardinal's plant in Oklahoma. Frac sand would then be separated and sold to companies in the oil and gas industry. The rest could be used by Cardinal for glass manufacturing.
Five Star said it took out a line of credit for $1.3 million to excavate and produce the stockpile of sand in Bridge Creek, where it's been sitting since December. That month, Five Star billed Cardinal Glass for $4.2 million. Court documents show Five Star has never been paid. However, Five Star says it learned that Cardinal did pay Timmerman for the sand, in excess of $4 million, but that Timmerman allegedly kept the money. A Cardinal Glass representative out of Oklahoma told WQOW News 18 that Timmerman has never worked for them, but would not elaborate on whether there was an arrangement to have him act as a middle man. Cardinal Glass and Five Star are both suing Timmerman. Click here to read those documents.
In recent weeks, residents have complained about dust blowing across Highway 27 and onto their properties. The DNR followed up with a visit to Five Star, but no one was there. The DNR then wrote the company with a series of questions. Click here to read that letter. Click here to read Five Star's response.
An attorney representing Five Star says they are working with Cardinal Glass and are in the process of trying to move the sand to a rail loading site.
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