A Duluth accountant who swindled more than $357,000 from two clients had no comment when he appeared for sentencing on two felony theft charges Monday.
Jesse David Frye did, however, make an initial lump-sum payment of $300,000 that will cover a substantial portion of his court-ordered restitution.
Frye, 40, was placed on three years of supervised probation by 6th Judicial District Judge David Johnson after admitting to stealing funds from the Duluth Area Chamber of Commerce and another local business that has not been identified in court documents.
Frye, who was arrested in January and spent three days in jail, will avoid any further incarceration under the plea agreement with the St. Louis County Attorney's Office. However, he must pay back a total of $357,881 and complete 90 hours of community service, among other conditions.
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Prosecutor Jon Holets said he doesn't often request community service, but felt it was important in a higher-profile case involving a breach of trust.
"Mr. Frye, by accepting responsibility, entering this plea and agreeing to pay up front a substantial — not all, but a substantial — portion of the restitution has really gone a long way to start to make these victims whole," Holets said. "I think there's another component to this, and that's starting to make the community whole for his actions."
Defense attorney Mikkel Long said he considered the community service request to be "reasonable" and simply asked the court to adopt the terms of the plea agreement. Asked by Johnson if he wished to make a statement prior to sentencing, Frye responded: "No, sir."
Frye, who owned Eagle Accounting in downtown Duluth, pleaded guilty to the felony theft charges in two separate cases Oct. 2.
Authorities said more than $235,000 was discovered missing from the Chamber during a routine financial review conducted in July 2019. Chamber officials contacted the Duluth Police Department, which found that Frye allegedly had been withdrawing funds and depositing them into his own accounts, often disguised with the label "payroll," over a two-year period.
"When confronted, (Frye) first offered implausible and incorrect excuses for the missing funds," a criminal complaint stated. "Eventually, defendant, via letter, acknowledged the thefts by offering a repayment schedule without 'outside action.'"
The second case came to light in late December when a business owner reported that he had been contacted by Frye's brother, also an accountant, who informed him of $122,000 missing from his business, according to court documents.
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Authorities initially charged Frye by summons in the Chamber case, reversing course and obtaining an arrest warrant after investigators learned of the ongoing nature of the swindle. Investigators subsequently said they have been able to trace the thefts, in some instances, to "dollar-for-dollar purchases" of expensive items such as a car and a new roof on a residence.
Frye received an accounting degree from the University of Wisconsin-Superior in 2003 and had worked his way up at Eagle Accounting, where he started as a teenager in 1997, he once told the News Tribune . He also has served in various community roles, including as president and board member of the Duluth-Superior Eco Rotary Club.
Chamber officials joined Monday's virtual hearing, but opted against making any formal victim-impact statement. President and CEO David Ross has said the Chamber's finances remain stable, member information was not compromised and Frye's access was revoked immediately after the discrepancies were discovered.
Ross earlier credited the Chamber's financial safeguards with exposing the swindle. He told the News Tribune after the plea hearing that he was pleased with the outcome of the criminal case.
"The Chamber's leadership is encouraged by his apparent desire to right the wrong he inflicted on the Chamber," Ross said at the time. "It appears Jesse Frye plans to address his wrongdoing in an honorable manner. For this, we are grateful."
