David B. Welliver, who lost $19 million in speculative investments of Minneapolis police and fire fighter union pension funds in the 1990s, was indicted for embezzlement in late May. But the indictment is not related to Welliver’s handling of the union pension funds. Instead, he is accused of stealing about $30,000 worth of pension funds from the retirement and savings accounts of employees at his investment companies.
In 1992, Welliver won the business of the Minneapolis Police Relief Assn., overseeing a $100,000 account. In 1994, he was hired by Technimar Industries of Houston to raise capital for a plant in Minn. that would manufacture Stonite, an agglomeration of sand, stone and chemicals used to make floors, counter tops and bathroom tiles. Technimar advertised Stonite as a low-cost alternative to DuPont’s Corian.
In 1996 Welliver persuaded officials with the police and fire fighter pension funds to invest $5 million in the Technimar venture. A year later, Technimar received another $9.1 million in short-term unsecured financing from the police union. Welliver also helped persuade the city of Cohasset to issue a $12 million bond with $2.3 million in cash as collateral. But by 1998, Technimar had collapsed without producing a single slab of Stonite, Welliver had filed for personal bankruptcy, and the police pension fund had lost $14.1 million, while the fire pension lost $5 million.
The unions sued Welliver in U.S. Bankruptcy Court, and in March 2000, he agreed to repay $14.6 million even as he admitted no wrongdoing and claimed he was broke. According to Welliver’s court-appointed lawyer, the five-year statute of limitations was set to expire for most of the acts for which he was indicted. [Minneapolis Star-Tribune, 5/28/03]