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Prosecutors: Slaying suspect played slot machines to exchange robbery money for clean cash

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MINNEAPOLIS — A man charged with killing his ex-boyfriend and business partner at a suburban St. Paul gas station played the slot machines at a casino to exchange dye-stained money from a bank robbery for clean cash, prosecutors alleged Friday in a document that provided fresh details about the suspect's month on the run.

Lyle "Ty" Hoffman, 44, was already charged with intentional second-degree murder in the shooting death of Kelly Phillips on Aug. 11. Hoffman also allegedly robbed a TCF Bank in Blaine on Aug. 31. The amended complaint filed Friday in Ramsey County District Court added no new charges to the complaint filed Aug. 15. But it gave new details about how Hoffman and Phillips' relationship soured and what investigators believe Hoffman did during the manhunt, which ended with his arrest Sept. 11 outside a fast-food restaurant across town in the Minneapolis suburb of Shakopee.

Hoffman and Phillips had been in domestic relationship for about 15 years, the complaint says. They also were partners in a Minneapolis bar. Their romantic relationship ended about three years ago, and Phillips later became engaged to another man. Hoffman continued working at the bar, which Phillips owned, until Phillips discovered that cash deposits were lower than they should have been, the complaint says. He fired Hoffman and evicted him from a nearby residence.

Phillips, 48, was also an attorney and vice president for the medical device company Boston Scientific.

On Aug. 11, the one-year anniversary of Phillips' engagement, witnesses at a gas station in Arden Hills heard an argument coming from his BMW, according to both complaints. They saw Phillips run from the car, then saw another man get out and shoot him twice from a distance before firing a third shot into the back of the kneeling Phillips' head from nearly point-blank range and fleeing in the BMW, the complaints say.

Hoffman hasn't been charged in the bank robbery, which happened three weeks later, but the new complaint says surveillance video shows him demanding money from a teller at gunpoint. The money was placed in his backpack, it says. A dye pack hidden in the money exploded across the street while Hoffman was wearing the backpack, the complaint says.

Witnesses later saw a shirtless man with red on his back, consistent with the dye, carrying a backpack.

Surveillance video from a Target store in Richfield the next day showed Hoffman carrying a backpack with holes in it and buying a new backpack, new clothes and a cellphone and SIM card, the complaint says. The video shows him going into the bathroom then exiting while wearing some of the new clothes and carrying the new backpack. A discarded backpack with red dye inside was found in a nearby trash can, the complaint says.

Hoffman then got on a bus to the Mall of America, where he missed a shuttle bus to Mystic Lake Casino near Shakopee and caught a cab there instead, the complaint says. He checked his backpack on the way in.

"He spent an hour playing slot machines, apparently feeding dyed money in and then receiving clean money when he cashed out," the complaint says.

Investigators searched the backpack, which he had left at the casino, and found several items he bought at Target including the phone and SIM card, the complaint says.

Hoffman was arrested without incident Sept. 11 when an alert citizen spotted him outside a Shakopee shopping center. Police found over $3,000 in dye-stained money on him and the claim slip for the checked backpack, the complaint says. He had burns and red marks on his back consistent with the exploding dye pack, it says.

Hoffman's public defender did not immediately return a phone call seeking comment Friday. He has a court date set for next Friday. He remains jailed on $2 million bond.

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