Charges filed recently in Sherburne County in the 10th Judicial District allege that three former employees of the City of Clear Lake defrauded the city of over $200,000 from late 2022 through 2023.

The former employees, Kari Koren (former clerk), Chad Koren (retired firefighter) and Dustin Luhning (former public works director), each face felony counts of theft and embezzlement of public funds.

According to a statement of probable cause in the criminal complaint, the Sherburne County Sheriff’s Office received a financial fraud complaint from the city in April of 2024, alleging that the three employees had been stealing funds.

A forensic accountant was subsequently hired to investigate the financial activity of the city from November 1, 2022 until December 31, 2023, and the review included credit card statements, vendor billing, payroll records, disbursements and bank statement activity.

Anoka County officials performed the investigation and signed the affidavits in the charging documents.

Those records indicate that Luhning originally claimed that wage overpayments made to him were a mistake.  Furthermore, he claimed that purchases from Luner Equipment and Discount Supply and Equipment “saved the city quite a bit of money”.    He later admitted to creating accounts for those vendors and profiting from the amounts the city paid for the purchases.  In all, Luhning’s financial fraud is alleged to have been in the amount of $71,077.45.

Chad Koren is accused of using a city credit card for personal purchases and defrauding the city of $4,987.17.  Koren provided a voluntary statement to the Anoka County Sheriff’s Office in which he admitted that “money was tight” and things had snowballed.

Kari Koren’s alleged illegal activity included payroll overpayment and fraudulent purchases totaling $125,217.37.  According to the charging documents, “defendant Kari Koren wrote a letter to the City Counsil (sic) during the investigation. She claimed that her actions were not intentional and that the errors in her accounting were either due to a software issue or because she forgot to reimburse the city for miscellaneous personal items.”

Later, on June 25, Koren provided a voluntary statement to Anoka County, indicating “she was going through some personal issues and financial hardship during that time period.”

Court records indicate that all three are scheduled for remote hearings on January 14, 2026 in Sherburne County 10th District Court.