HIBBING, Minn. — Cheryl Shega lived nearly all of her 67 years at her parents’ house in rural Hibbing, Minn.
She once tried moving into an apartment, but was back home within three months. She was never able to cook full meals or complete basic household chores. She never maintained steady employment or had any significant relationships outside her immediate family.
Family members say Cheryl was “very low-functioning” — childlike in many ways — and susceptible to sudden mood swings. While not officially diagnosed, it was commonly understood that she suffered from some form of mental illness, according to her siblings.
It was that vulnerability, a lawsuit alleges, that allowed Cheryl to become a victim of financial exploitation in her final years as her parents’ health deteriorated and she was presented with more responsibility.
Her two siblings, who live in the western United States but made frequent trips back home, say Cheryl became increasingly isolated after their parents died. She stopped returning calls and apparently went months without leaving the house.
It was only after Cheryl’s death in May 2019 that family members say they learned the rest of the story. For several years, she had been communicating with a Colorado woman claiming to be a long-lost cousin, agreeing to keep their phone and email conversations secret.
And, the siblings discovered, Cheryl had made changes to several bank certificates that they thought were protected in a family trust. The alleged cousin, Laura Craig, had been named sole beneficiary of the life savings Edward and Charlene Shega had designated for their children.
The surviving children, Greg Shega and Nancy Weiser, say they were astonished to learn that the certificates totaled nearly $250,000 — a small fortune amassed by their parents through a modest lifestyle built on Ed’s 42 years of work in the Iron Range mines.
“(It was) everything Ed and Charlene worked for their entire lives,” said Amy Weber, Greg’s wife. “Everything they did was for their children. It’s like a destruction of someone’s complete life work, gone to people who couldn’t care less what it took from the family they stole from. It would kill Ed and Charlene if they knew where their life savings went.”
A complaint filed in State District Court last summer accuses Craig and her husband, Stephen Craig, of exploitation of a vulnerable adult, unjust enrichment, undue influence, tortious interference, deception/fraud and intentional misrepresentation.
It also faults American Bank of the North and its employees for aiding and abetting Cheryl’s exploitation by ignoring signs of her impairment, as well as negligence in releasing the funds to Laura Craig despite warnings from an attorney.
“No one would believe any of this without the documents to prove it happened,” Weber told Forum News Service.
The Craigs and the bank have denied the allegations, arguing that Cheryl did not meet the legal definition of a vulnerable adult and that there was nothing improper about her transfers or the bank’s distribution of the funds to Laura.
But a Duluth judge in January denied the defendants’ motions to dismiss the suit, finding sufficient cause for the case to proceed beyond its initial stages.
Simple life with 'frugal' parents
Cheryl, the oldest of the siblings, never had much interest in money or material possessions, the lawsuit states.
She lived off her parents, wearing the same clothes for decades and preferring to cut her own hair. She would hang doll clothes in the closet and befriend wildlife on the family’s secluded property on County Road 16, but most often she could be found watching television or sleeping.
The complaint describes her parents as “frugal, hardworking individuals” who “presented to the world as having limited financial resources.” Ed, a Korean War veteran, never made more than $30,000 a year, Weber said.
Based on that belief, the other siblings said they routinely provided financial assistance. Greg and Amy traveled multiple times a year from Arizona to help out around the property, at times purchasing and installing new appliances. Nancy also made routine trips from her home in Utah.
Cheryl, while prone to emotional outbursts, seemed content living with her parents and having regular contact with her two siblings and Greg's son, Zachary. But that changed after Charlene died suddenly in March 2015, the family said.
The siblings recall Cheryl repeatedly asking in despair: “How could she do this to me?”
“Cheryl had always lived within her own perception of reality,” Greg and Nancy stated in affidavits filed with the court. “Up until (our) mother’s death, however, there had not been a reason to challenge her thinking. This was the first time Cheryl had to face a reality other than those she had known until mother’s death.”
Battle over father's care
Ed was suddenly reliant on his daughter to run the household, the complaint states.
He soon had a hospital stay based on concerns about his health and compliance with medication. By December 2015, he required an ambulance trip back to the hospital, and Greg and Nancy said they became so concerned that they began investigating how to legally remove him from Cheryl’s care.
The siblings said Cheryl was insistent upon having her father come home, but they prevailed in sending him to a skilled nursing facility, Guardian Angels Health and Rehabilitation Center in Hibbing. The lawsuit claims that Ed was “thrilled” to be at the facility, but Cheryl soon began making “outlandish accusations” against staff and insisting that he return home because there was no money to pay for his stay in long-term care.
“This behavior by Cheryl of refusing to care for her father’s health because of potential costs was very out of character for Cheryl, who had always been childlike in her dealings with finances,” the complaint states. “It was also out of character for Cheryl to want this kind of responsibility as she had spent her whole life wanting others to be in charge of these types of decisions.”
Greg and Nancy said they purchased equipment such as grab bars and lift chairs for the family home, allowing Ed to return home upon Cheryl’s insistence in March 2016.
Cheryl “continued to be uncooperative” with her father’s care providers, the complaint states, and his condition continued to deteriorate prior to his death in May 2017.
Secret contact with Laura
What the siblings say they did not know at the time is that Cheryl was in frequent contact with her secret connection, Laura Craig, while making the decisions about her father’s care.
The family later discovered that Cheryl had first reached out to Craig in 2012, asking: “Are you my cousin?”
The complaint states that Cheryl had a “preoccupation” with finding long-lost relatives, compiling binders of information and sending emails to strangers as far away as Slovenia and Croatia. The siblings had a cousin, Laura Johnson, whom they had not heard from since 1980, when she joined a religious sect.
Craig has submitted an affidavit asserting that she is, indeed, the former Laura Johnson. The lawsuit, though, claims “there are many reasons to doubt that.”
The complaint states that Craig asked Cheryl to keep their relationship a secret and that they had sporadic communication prior to Charlene’s death, when the frequency of calls and emails increased. The family alleges that Craig persuaded Cheryl to seek alternative health remedies for her father and drift away from her siblings.
“In hindsight, it has become evident that Laura, with the assistance of her alleged husband, Stephen, were the driving force behind Cheryl’s new focus on finances and attempts at conserving money,” the complaint states.
Family written out of deposits
In August 2016, Cheryl switched beneficiaries on the first of the four certificates of deposit — the only one she owned outright — from her siblings and nephew, Zachary, to Craig.
Almost immediately, according to the lawsuit, she stopped communicating with Zachary, whom she had once described as the “most precious person in my life.”
She made the same changes on the three remaining certificates over the course of four weeks in fall 2017, months after her father’s death. The siblings say those certificates were supposed to remain untouched under the terms of the family trust, but bank employees authorized Cheryl to name Laura Craig as the recipient upon her death.
Cheryl and Craig's communications then “significantly declined,” the lawsuit alleges.
Cheryl dies after struggle living alone
Meanwhile, the siblings say, Cheryl was struggling to live on her own. Greg and Nancy would take turns flying in to visit, helping with maintenance of the house and leaving notes throughout the house with instructions on how to complete household tasks.
In May 2019, the complaint states, Cheryl’s health “took a serious decline” and Nancy requested that the Hibbing Police Department conduct a welfare check after numerous calls went unanswered.
Police found an “alarming” scene, according to the family. Cheryl was thin, unkempt and confused. There were stacks of newspapers, piles of waste, dead mice and rats, dirty clothes and cat feces strewn about the house.
It appeared Cheryl had been living off Little Debbie snacks and Dr. Pepper and not sleeping in any of the beds, according to the complaint.
She was admitted to the hospital, and Nancy was appointed as a guardian, but Cheryl “expressed a desire that Nancy not be contacted,” the lawsuit states. The siblings claim that Laura Craig subsequently made a series of calls, telling hospital staffers that Cheryl simply had a sinus infection and that Nancy wanted to put her in a nursing home and start “cashing out the home and trust” for financial benefit.
“Laura appears to be the only one that even knew that money existed in the estate,” the complaint states. “Gregory and Nancy had no idea that Edward and Charlene had acquired nearly $250,000 in assets through their certificates of deposit.”
Cheryl died from malnutrition, catatonia and a bowel obstruction on May 27, 2019. The next day, according to the complaint, Greg and Nancy went to American Bank and learned that she had named Laura as the beneficiary of their parents’ savings.
Siblings fault bank for releasing funds
Ed and Charlene had established the trust in November 2009, incorporating essentially all of their assets, including their home, according to the lawsuit.
Recognizing Cheryl’s inability to provide for herself, they named her the primary beneficiary after their deaths, with Greg and Nancy listed as successor beneficiaries.
The complaint states that Ed and Charlene signed a “joint request for retitlement,” asking American Bank to transfer all of their accounts and certificates into the trust. But it remains unclear whether the bank actually received the notice and made the change; the lawsuit states that officials would not cooperate with pre-litigation requests for records.
The siblings claim Cheryl lacked legal authority to change beneficiaries in the first place. The suit also alleges bank employees were familiar with Cheryl’s limitations and should not have authorized the changes.
Ten days after her death, attorney David Crosby sent a letter to American Bank, asking officials to hold off on releasing funds because Cheryl was legally considered a “vulnerable adult” due to “long-standing medical, physical and emotional infirmities and dysfunction.”
But, in late July, the bank received a competing letter from Laura Craig’s attorney requesting payment. The next day, officials released the funds totaling $247,188.89, the complaint states.
The court record includes a June 30 email in which Craig told attorney Crosby she was “actively pursuing the gathering of information and support for the wrap-up of Cheryl Shega’s life.”
“That phrase haunts us,” Weber said. “Cheryl meant nothing to the Craigs.”
Craigs bemoan 'innuendos and irrelevant allegations'
Representatives of the Craigs and the bank declined to comment when reached by Forum News Service. But court filings from both deny any wrongdoing and provide insight on the defense.
Chuck Shreffler, a Twin Cities attorney for the Craigs, lambasted the complaint as “(filled) with innuendos and irrelevant allegations.”
He said there is no supporting documentation to suggest that the Craigs turned Cheryl against her family or influenced her to change the certificates, with the complaint instead relying on speculation about what was said during phone calls.
Laura Craig asserted in an affidavit that she is, in fact, the former Laura Johnson, and her father is the brother of Charlene Shega. She said it was Crosby who first contacted her in June 2019 and that she did not initiate communication with the attorney.
As for Stephen Craig, Shreffler said there was no evidence of him ever having contact with Cheryl, other than sending a Facebook friend request that went unanswered.
Shreffler also argued that Cheryl failed to meet the criteria of a “vulnerable adult” as defined by Minnesota law and that she was capable of making the transfers.
“There is no allegation that Ms. Shega, when she changed the beneficiaries on her CDs in 2016 and 2017, had an impaired ability to provide for her own care without assistance, nor is there any allegation that Ms. Shega had an impaired ability to protect herself from maltreatment,” he wrote. “Indeed, there is no dispute that she lived on her own until May 2019.”
Couple, bank say transfers were proper
Attorneys for the Craigs also cited the Minnesota Multiparty Accounts Act, which governs the deposit of funds from joint financial accounts.
Shreffler said Cheryl’s estate — officially the plaintiff in the lawsuit — “must present clear and convincing evidence that Cheryl Shega had a different intention” than to leave the money for Laura Craig upon her death.
“(The complaint) alleges that Cheryl must have or should have had a different intention,” he wrote, “but that is not evidence of a different intention.”
Grand Rapids, Minn., attorney Jenna Jahn argued the bank is legally protected from liability when it distributes funds under payable-upon-death arrangements, adding that the siblings failed to prove that the bank had actually received formal notice to place the certificates into the family trust.
Jahn acknowledged the letter from Crosby, but said “neither Gregory or Nancy were entitled to request payment” and argued that the bank “owed Cheryl a duty of care to carry out her wishes” — that is, releasing the funds to Craig.
The current and former bank employees named in the suit, Becky Radika and Gerri Chapman, both told the court that they were vaguely aware of the family but “never had any firsthand knowledge that Cheryl Shega was a vulnerable adult or had any mental impairments.”
“The bank has no duty of care to be aware that Cheryl was a vulnerable adult on its own and would be violating duty of care to clients by independently launching investigations into anyone’s capacity,” Jahn wrote. “Similarly, the bank had no duty of care to reach out to Gregory or Nancy to inquire about Cheryl’s assets.”
Judge refuses to dismiss case
Despite the defense claims, the complaint “contains multiple facts that support a determination that Cheryl was a vulnerable adult,” 6th Judicial District Judge Jill Eichenwald ruled in January.
Eichenwald declined to dismiss any of the counts against the Craigs or the bank, saying the estate had produced sufficient evidence of factual disputes that could be reviewed by a jury.
While most of Cheryl’s communication was with Laura, Eichenwald noted that there were claims of Stephen twice sending her friend requests and once sending her a video. He also signed a sympathy card after her father’s death, and many text messages and emails were presented as coming from both.
“The communications spoke of the Craigs needing financial help, emails about religion when Cheryl was never particularly religious, and holistic medication advice,” the judge noted. “Assuming the allegations in the complaint are true, the Craigs’ contacts with Cheryl were intended to obtain financial gain in the form of becoming the beneficiary of Cheryl’s CDs.”
Eichenwald said it’s “unlikely the Craigs actively participated in changing the designations on the CDs.” But she wrote that the couple had the opportunity to exercise significant influence over Cheryl’s life and that Laura provided “false information” to interfere with her medical care.
Estate to continue pursuing funds
The Multiparty Accounts Act was not relevant to the motion, the judge said, because there was no dispute about Cheryl’s intention in changing beneficiaries. Rather, it was an issue of the “validity of the change” and her alleged inability to understand the effect.
Eichenwald further ruled the bank was not “obligated” to release the deposits to the Craigs and even would have been protected under state law had it held on to the funds after receiving notice of suspected exploitation from Crosby.
“There are also facts alleged that support the bank and its employees knew or should have known Cheryl was a vulnerable adult,” the judge wrote, “as her parents were life-long customers of the bank in a small community, Cheryl often accompanied them to the bank, and Cheryl was a life-long dependent of her parents.”
The estate “had an expectation of the assets,” Eichenwald said, and absent involvement of the Craigs and the bank, it is “reasonably probable the CDs would have remained with the estate.”
The lawsuit seeks upward of $250,000 in damages on each of the eight counts. A scheduling conference has been set for March 9 to establish future court dates as litigation continues.