Plea hearing set for former Minnesota elevator manager accused of fraud
MINNEAPOLIS — Jerome "Jerry" Hennessey, the former general manager of the Ashby (Minn.) Farmers Cooperative Elevator, is scheduled for a federal plea hearing on Valentine's Day.
Hennessey, 56, is accused of stealing $5 million from the elevator over at least 15 years to fund his big game hunting exploits, among other things. He is scheduled to appear at 10 a.m. Feb. 14 before Chief Judge John Tunheim in Courtroom 15 in Minneapolis.
Hennessey turned himself in to federal authorities on Dec. 5, after having been formally charged on Dec. 4 with one count each of mail fraud and federal income tax evasion. He has been confined to the state since then.
Hennessey and his wife returned from a final hunt in Australia in late August. He missed a Sept. 1 refinancing deadline for the co-op. On Sept. 10, he failed to show up for a co-op board meeting and convinced a former co-op worker to drive him to Des Moines, Iowa.
According to the indictment, Hennessey used the U.S. Postal Service to mail a $34,166.67 check to a landowner from whom Hennessey was purchasing property on a contract for deed, according to the complaint. In 2013, says U.S. Attorney Erica H. MacDonald, Hennessey reported $97,329 in income, for which he would owe $16,189 in taxes, when instead his true income would have required "at least $270,000 in additional tax due."
Federal authorities believe Hennessey used his position to write checks to himself and to third parties from 2003 to his suspension in September 2018. Checks were falsely represented for purchase of corn, soybeans and other operating expenses and supplies, but he wrote numerous checks exceeding $40,000 and one in 2009 totaling $135,000. He used them for renovating and "building two additions to his residence, renovating a hunting cabin, purchasing all-terrain vehicles, paying his personal credit cards and paying the property taxes on several pieces of land," according to court documents.
Hennessey wrote numerous checks to pay for personal credit cards, including "numerous checks that exceeded $20,000." He paid for "taxidermy, furniture, freight for the shipment back to Minnesota of numerous animals he had killed during overseas trips, jewelry, expenses related to all-terrain vehicles, clothing, entertainment, personal travel, domestic and international hunting trips, and attachments for a skid steer loader."
Prosecutors say he wrote more than 100 checks for personal expenses. They say he used his position as manager to obtain a line of credit for about $8 million for the co-op's seasonal expenses but used them to "cover the fraudulent payments made by the defendant for his own personal benefit." He made "numerous misrepresentations" to the lender, including "the amount of grain the co-op had in storage," documents say.
The list for federal forfeiture in the criminal case includes property in Brook Park, Minn.; Dalton, Minn.; and Eagle Lake Township in Minnesota's Otter Tail County, as well as a 2011 Bobcat.
It isn't clear how this conflicts with the efforts of the co-op to obtain these properties for the benefit of farmers and other creditors.