Home Valu: New Criminal Investigation

MINNEAPOLIS - The FOX 9 Investigators have learned there's now a second criminal investigation underway into whether “Home Valu” broke the law and committed a theft of hundreds of thousands of dollars.

The Anoka County Attorney’s office confirms the company is the focus of a “Theft by Contractor” investigation. Gary Miller, a subcontractor who installed floors for Home Valu, is waiting to be paid $15,000 by the home improvement chain founded by former U.S. Senator Rudy Boschwitz.

Miller is one of dozens of installers across Minnesota, Iowa and Wisconsin who say "Home Valu" collected hundreds of thousands of dollars from customers then didn't pay the subs that completed the jobs.

FOX 9 previously reported that the Boschwitz family run business is also under investigation by police in the Milwaukee area, suspected of violating the Wisconsin "theft by contractor" law, which can be a felony. Minnesota’s law is similar except it’s a gross misdemeanor. Both states mandate that if a company such as Home Valu is paid by customers, its first obligation is to pay the subcontractors regardless of its own financial problems.

Home Valu shut down in early January blaming its downfall on the miserable economy. Later that month it was forced into an involuntary bankruptcy by some of its vendors.

In court documents, the Boschwitz’s blame M&I bank for leaving subcontractors empty handed.

They claim the bank, which had given "Home Valu" millions in a line of credit, dictated which subcontractors and vendors got paid, as well as when they got paid and how much they got paid.

"I think that's like saying alright, I'm the bank, go rob the other bank and bring the money back to us because that's what they were doing to us," says Miller.

He’s part of a group of subcontractors which is suing the Boschwitz’s and the bank, accusing them of orchestrating a scheme to use the installer's money to pay off Home Valu's credit line.

M&I bank declined to comment for this story. Home Valu founder Rudy Boschwitz also declined to answer any questions about the lawsuit or the criminal investigations.