The Minot City Council plans to consider a letter asking for a more severe sentence than the one recommended by prosecutors for a former Minot nonprofit director charged with theft of federal funds.

The council voted unanimously on Monday, July 6, to have staff draft and bring back a letter the city can send to the court.

Elizabeth Larsen, also known as Elizabeth Myers, is charged in U.S. District Court with federal program theft in connection with missing funds in the Broadway Circle project, which was supported by U.S. Department of Housing and Urban Development dollars as part of the city’s National Disaster Resilience Program. She resigned from Project BEE in December 2023.

She is set to plead guilty in U.S. District Court, and the prosecution has recommended a sentence of two years’ probation and full restitution. The plea and sentencing are set for Sept. 23.

Mayor Mark Jantzer said he has heard from residents who question whether the proposed plea arrangement is fair.

City Attorney Stefanie Stalheim said she reached out to the assistant U.S. attorney who is prosecuting the case and was told the plea agreement is in line with damages in the case, which is around $61,000. She said that is the amount that prosecutors can show the defendant spent on herself.

The prosecutor also said anyone impacted who would like to be heard on the case is welcome to draft a written statement. Stalheim said people can submit statements to the victim witness coordinator. For contact information for the coordinator, people can call the city attorney’s office, she said.

“If you steal money from a vulnerable population, I think that makes it especially problematic, and I think the city should go on record asking for more severe consequences,” council member Stephan Podrygula said. “I don’t think we should just stand idly by and go for reimbursement – very partial reimbursement.”

Jantzer said the actions of the former executive director impacted the city in terms of needing to take more than $1 million from its reserves to ensure the Broadway Circle project was finished. The city also had to search for a new subrecipient to take over the agreement to operate Broadway Circle.

“There was a substantial amount of staff time and effort following and participating in a case that was eventually built against Larsen-Myers,” he said. “Although she didn’t directly steal money from us, she certainly caused both financial and effort issues.”

City Finance Director David Lakefield said Project BEE was to fundraise to augment federal dollars to complete the project. Project BEE didn’t have the money to complete the project, so the city stepped in with general fund reserves to pay contractors, he said.

Stalheim said that money is not part of this criminal case. Any money recovered in the case will go to HUD.

“It’s not a good situation, without question, and the taxpayers are directly out of the money,” council member Mike Blessum said. “But at the end of the day, contractors need to be paid, and we can’t put our entitlement status at risk over these types of issues.”

Jantzer agreed that failing to ensure the project went forward would have been seen as noncompliance with the city’s agreement with HUD, forcing the city to pay back the federal dollars.