Former Co-Op Manager Pleads Guilty to Charges for $5.3 Million Fraud
The former general manager of a cooperative in Minnesota has plead guilty to charges of mail fraud and tax evasion after stealing $5.3 million.
On Feb. 14, Jerome Robert Hennessey, 56, from Dalton, Minn., accepted one charge of tax evasion and one count of mail fraud, according to U.S. Attorney Erica H. MacDonald in a press release. Hennessey was charged with the felonies on Dec. 18, 2018. He entered his guilty plea last week before Chief Judge John R. Tunheim in U.S. District Court in Minneapolis, Minnesota.
In the guilty plea it says from 2003 until September 2018, Hennessey oversaw day-to-day activities for the Ashby Farmers’ Co-Operative Elevator Company in Ashby, Minn., as the general manager. Part of his responsibilities were to control the bank accounts and obtain loans for the business. From his position Hennessey wrote checks to himself and to third parties.
Several checks written to himself were valued over $40,000, with one check at $135,000.
Other checks were written to pay international hunting safaris and taxidermy services worth hundreds of thousands of dollars. For example, at least twelve checks were found by investigators totaling more than $400,000 that paid for items like “South Africa Mounts” and “Zimbabwe Double Kudu Pedestals” and for a “Zebra Pedestal.”
Checks were also used to pay for more than $1 million in payments for Hennessey’s personal Cabela’s Visa Card. Hennessey also used funds to pay for real estate, cover property taxes, purchase all-terrain vehicles, make improvements and renovations to a residence and cabin.
The mail fraud happened on Jan. 27, 2017, when a co-op check worth $34,166.67 was sent via U.S. mail by Hennessey to help pay for the purchase of a hunting property in Kanabec County.
The elaborate scheme started to unravel on Sept. 10, 2018, when Hennessey failed to show up at a morning co-op meeting where the suspicious payments were to be addressed. He instead was driven by a friend to Des Moines, Iowa. Two of Hennessey’s acquaintances later admitted that he had taken money from the co-op and was in a lot of trouble. On Dec. 4, Hennessey surrendered to authorities.
The guilty plea by Hennessey admits that payments had attempted to be disguised by making carbon copies of the checks that falsely claimed to have been made for soybeans, corn or other operating expenses or supplies for the co-op. The carbon copies were then provided to the co-op bookkeeper in an effort to make the funds look like they were legitimate. To help cover the millions of dollars stolen, Hennessey took out a line of credit for more than $7 million.
In all, Hennessey stole approximately $5,338,922.21.
The Internal Revenue Service-Criminal Investigation Division, the Grant County Sheriff’s Office, and the Minnesota Bureau of Criminal Apprehension were all part of the investigation. Prosecuting the case was Assistant U.S. Attorney John Kokkinen.
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