$3.7 Million in Restitution Ordered in SE MN ‘Romance Scam’ Case

Wabasha, MN (KROC-AM News) - Restitution has been set at more than $3.7 million in the case of a southeastern Minnesota woman who bankrupted her employer by stealing the funds to meet the demands of a so-called "romance scammer."

61-year-old Sharon Ann Schmalzreidt was sentenced this week for her conviction on a felony theft charge. The Wabasha woman earlier entered a guilty plea to the charge through a plea agreement that led to the dismissal of a felony count of financial exploitation of a vulnerable adult.

According to the criminal complaint in the case, Schmalziedt began an online relationship with a man she knew as Erik Lockwood. She told investigators the man told her he needed money in order to access $7 million he was owed for work that he had performed in Dubai, and that he would pay her back. 

The court document says Schmalzeidt admitted sending the scammer money she stole from her employer after she had given him all of her own funds. The evidence listed in the case included a review of her cell phone that showed that she was aware she was stealing from her employer and that her actions drove the unnamed company into bankruptcy.

The charges stated she worked as the bookkeeper for a business based in Lewiston. The thefts began in October 2019 and continued through last March, when she was fired.

The criminal complaint says the owner of the firm hired a Chief Financial Officer from an outside firm after noticing multiple large transfers of funds to organizations that were not associated with the business and had the same bank account numbers.

The Minnesota Bureau of Criminal Apprehension then join the investigation. It determined the company's losses from the thefts totaled more than $3.7 million. 

It was also alleged that Schmalzriedt stole more than $17,000 from a vulnerable adult in her care. The charges stated that the stolen funds had been set aside to pay the victims nursing home bills.

For her conviction, Schmalzeidt was given a stayed 21 month prison sentence and was placed on probation for five years. The prison sentence could be enforced if she fails to meet the terms of her probation.

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$3.7 Million in Restitution Ordered in SE MN ‘Romance Scam’ Case