The roots of Schneider Carpet One Floor & Home go back nine decades.

The floor-covering business began in 1935 with Andrew Schneider cleaning rugs at his St. Paul home. It grew to a downtown building, then to West Seventh Street, where the family-owned business remains.

Ryan Charles Gordon (Courtesy of the Ramsey County Sheriff’s Office)

“He worked very hard and sacrificed his family to build this company,” said owner Patrick Schneider, Andrew Schneider’s grandson, in a Ramsey County courtroom Wednesday. “Ryan Gordon almost destroyed it in 18 months.”

Gordon, the business’ former chief financial officer, was charged in December with three counts of theft by swindle for embezzling close to $200,000 after he was hired in late 2022. He reached an agreement with the prosecution and pleaded guilty to one count.

Judge Richard Kyle sentenced Gordon, 29, on Wednesday to six months in the workhouse — the maximum allowed under the plea deal — followed by three years of probation. Gordon, of Neillsville, Wis., was ordered to pay the business $250,000 in restitution.

St. Paul police had already seized $147,000 from Gordon that will go toward the restitution, his attorney told the judge.

The plea deal includes a stay of imposition, meaning the conviction will be reduced to a misdemeanor if he pays the remaining restitution balance by the end of his probationary term.

He opened credit cards

The business on West Seventh Street and Armstrong Avenue told police they hired Gordon three months before the former CFO, who worked for the company for about 38 years, planned to retire, according to the criminal complaint.

As a paper trail would later show, Schneider told the court on Wednesday, Gordon “started manipulating our bank accounts almost immediately.”

In August, an accountant for the business called Schneider to report that Gordon wasn’t providing the documents necessary to prepare state and federal tax returns and to make the associated payments for the business, and raised the possibility that Gordon was stealing funds from the company.

Schneider looked into Gordon’s work and “found questionable payments from the business to unknown credit card accounts along with unauthorized payroll increases and missing funds,” the complaint said.

Schneider found Gordon appeared to have opened four credit cards; transaction records “pointed to Gordon making payments from the business bank account to credit cards in his name along with payments on his student loan, another loan in his name, and for his property taxes, amongst other payments and transactions,” the complaint continued.

The business fired Gordon and hired an independent financial comptroller and an IT company to analyze the hard drive of Gordon’s business computer.

A deleted file was recovered, which was a purported promissory note created on Aug. 26, within a few days of the accountant alerting Schneider. It included statements about Gordon making payments of $200 per week from his payroll check to begin on July 18, 2024, and continue until a balance of $187,317.83 was paid.

Schneider Carpet One asked Gordon whether he could bring in a check to cover the business funds that he used to pay his personal expenses. “Gordon responded by stating that he did not have anything near the amount of money required,” the complaint said; investigations showed he held more than $135,000 in a brokerage account and another $12,000 in a different account.

Investigators found Gordon was in the process of buying a home in Neillsville, Wis., about 140 miles east of his then-St. Paul address. The purchase price was $269,900 and the closing date “was fast-approaching when it was uncovered as part of the investigations,” the complaint said. Gordon was planning to bring $120,000 to the closing and finance the rest.

Police interviewed Gordon in October. He said he took more than $187,000 from Schneider Carpet One and said the owner agreed to loan him “as much money as needed to allow Gordon to buy a house, pay off bills, and to otherwise spend the money as he would choose,” the complaint said.

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Gordon also admitted to giving himself and a former coworker raises.

Gordon told police he hadn’t informed the business about the circumstances of his termination from a previous job at Carpet King. That business reported to police that they terminated Gordon in June 2022 “due to an inability to properly manage business finances,” the complaint said.

‘Nearly bankrupt’

Schneider said Wednesday that Gordon maxed out their $350,000 line of credit at the bank “due to the embezzlement of funds and poor management of the company. For the first time in all the years, the company was nearly bankrupt.”

During the embezzlement, Schneider was in the process of selling the business to his son and another project manager. The deal was put on hold, as was Schneider’s retirement.

“Ryan not only negatively impacted my life and my company’s financial state,” he said, “but his actions negatively impacted all of my staff, my accountants, my vendors, my family.”