Ex-car dealer cleared in criminal case
Former Jennings Bank victim of 'sloppy banking practices'
Tuesday, March 27, 2012 5:26 AM
Star Tribune and Hannah Johnson of the Stillwater Gazette
A Washington County judge has cleared a former Stillwater car dealer of criminal accusations that he swindled the former Jennings State Bank of Stillwater, contributing to its failure.
Daniel P. Routson was found not guilty of all three felony counts against him after a bench trial before District Judge Ellen Maas. She dismissed all charges.
"I continue to be troubled about the damage of these public accusations and the unnecessarily prolonged legal process has done to my credibility and that of my family," Routson said.
He said he maintained his innocence from the start and "fought for over three years to clear my name."
In a statement to the media, Routson said, "It is unfortunate that my family and I were subjected to the misleading and inaccurate information published in the news and on numerous online forums.
"I am pleased that I have been cleared of these charges, and I am dedicated to restoring the credibility and reputation that was fostered in the community by my family and me through our business and philanthropic efforts over the past 30-plus years."
According to the court findings, Routson Automotive entered into a loan agreement with Jennings State Bank in 2004 in which Jennings agreed to loan Routson $600,000.
The outstanding loan balance was between $700,000 and $800,00 during its four-year tenure, which Routson had signed a personal guarantee of paying back.
Under the terms of the loan agreement, Jennings loaned Routson 75 percent of the purchase price for each car Routson bought. Then Jennings would hold the title card and the bill of sale for each car financed until Routson repaid the loan for each car.
During the loan term, the company's inventories were typically 60 to 80 cars on Routson lots.
In the summer of 2008, Routson announced to Jennings that he and his family planned to close his car dealership.
Routson "from the beginning" tried to work out a repayment arrangement with Jennings, according to the court's findings.
During an August 2008 meeting with one of the Routson family members to discuss closing the dealership, Jennings stated that 58 cars were "missing" from Routson's lot.
Later that month, Jennings reported to the Stillwater Police Department (SPD) that Routson stole the missing cars.
Routson told Jennings he would find the missing cars and return them to the lot as well as repay his debts.
Routson voluntarily met with SPD to discuss the allegations against him, and he also paid a $12,000 insurance premium at Jennings' request.
Routson also sent a letter to Jennings through his attorney stating he wanted to continue discussions of repaying the loan to "fully satisfy" his obligation to Jennings.
The court found that the police investigation took three weeks without any interviews of Routson auto salesmen or the dealership's bookkeeper.
There was also no independent review of Routson's business records, which he made available for review during his police interviews.
Without further local law enforcement investigation, a formal complaint was prepared charging Routson with three felonies.
After Jennings produced all documentation during discovery, Routson was given the first opportunity to reconcile his records with the bank's records.
He discovered that all of the allegedly stolen cars were sold and accounted for with matching deposits and released title cards and bills of sale.
There was no evidence that any buyer had failed to receive their title cards or that there were any irregularities.
Court clears Routson
"This court is satisfied that the 58 cars in question have been accounted for and the related sales all were legally consummated," Maas wrote.
One of those alleged circumstances was Routson's alleged theft of bank collateral, which Maas, in her March 1 order, said was the bank's fault because of poor accounting.
State regulators closed the bank in 2009 after chief executive Paul Jennings said a complicated chain of events had led to its demise.
"Jennings is more a victim of its own sloppy banking practices," she wrote.
The criminal prosecution of Routson, Maas said, was "incredible, without merit and, at the very least, disingenuous."
After regulators revoked the charter of the Jennings bank, it was sold to Central Bank of Stillwater.
Editor's note: Since that time, the Spring Grove branch has been sold to Merchants Bank.