In September 2025, the Ramsey County Attorney’s Office filed felony charges against Jose Herrera, Carrie Gutbrod-Herrera, and Joseph Herrera for wage theft, insurance fraud, and tax evasion. As set forth in the criminal complaints, the Herreras committed fraud while receiving hundreds of thousands of dollars pursuant to a government contract for a roofing project at the McDonough Homes. The St. Paul Public Housing Agency (“PHA”) manages the McDonough Homes, which provide housing for low-income families.
The three Herrera defendants are immediate family members. Jose Herrera and Carrie Gutbrod-Herrera are married. Joseph Herrera is their son. The charges against them remain pending in Ramsey County Court Files ••-CR-••-••••, ••-CR-••-••••, and ••-CR-••-••••. The Herrera cases resulted from a collaborative law enforcement investigation into wage theft and related fraud against the government conducted by the St. Paul Police Department (“SPPD”), the Minnesota Bureau of Criminal Apprehension (“BCA”), and the Minnesota Department of Revenue (“DOR”). Around the time the charges were filed, these law enforcement agencies received additional information pointing to continued fraud with the roofing replacement project at the McDonough Homes even after the Herreras were no longer involved.
SPPD began analyzing payroll and related records to determine if wage theft continued during the summer and fall of 2025, when the second phase of the roofing project was completed. The BCA simultaneously evaluated the possibility of further insurance fraud related to the workers’ compensation coverage for the individuals working on the second phase of the project. This continued investigation of the roofing work at the McDonough Homes and the general contractor on the project, the Marge Magnuson Construction Company, Inc. (“Magnuson Construction”), uncovered additional criminal activity as set forth below.
Magnuson Construction Awarded Government Contract In April 2024, PHA contracted with Magnuson Construction to perform a roofing replacement project at the McDonough Homes. The McDonough Homes consist of 580 townhome-style apartments providing housing for low-income families. The McDonough Homes are located in St. Paul, Ramsey County - off of Jackson Street and along Timberlake Road. The first residences at the McDonough Homes were built in 1952. The roofing project was part of PHA’s efforts in recent years to modernize and otherwise invest in the townhomes.
The contract called for PHA to pay Magnuson Construction over $1.5 million for the roofing work. Workers performed phase one of the roofing work at the McDonough Homes from approximately June 2024 to October 2024. The work included tearing off and replacing shingles on two-story multi-unit housing buildings. The workers also replaced gutters and downspouts at the residences. Investigation During Phase One of Project SPPD first received reports of problems at the McDonough Homes worksite in 2024. Initial reports indicated that workers did not have fall protection.
