MINNEAPOLIS — Federal attorneys are recommending against early release for co-op fraudster Jerry Hennessey, after the former Ashby co-op manager was diagnosed with asymptotic COVID-19.

Hennessey as of July 14 still awaited a federal judge’s decision on whether he should get “compassionate release” from a North Carolina low-security federal prison, based on concerns about the pandemic.

On May 31, Hennessey tested positive for COVID-19, according to documents. The testing was a preventative measure and not because he had any symptoms. Hennessey remained asymptomatic as of June 12, when Robert M. Lewis, an assistant U.S. attorney, argued he still should not be released.

More immunity?

Lewis argued that if Hennessey recovered after 14 days of quarantine he would have developed “at least some level of immunity” from the disease. If not, he’d be treated by the Bureau of Prisons, near a Federal Medical Center at Butner. Lewis said Hennessey had proposed he “drive across the country” to home confinement with a daughter near Minneapolis, but that “only expands the scope of the threat.”

In an original objection, Lewis said Hennessey for 15 years perpetrated a multi-million-dollar fraud against members of the Ashby Farmers Cooperative Elevator. Hennessey on Feb. 14, 2019, pleaded guilty to mail fraud and tax evasion. He was sentenced to 8.5 years in federal custody. He reported to a federal prison called Butner Low Federal Correctional Institution in Butner, N.C., June 29, 2019. Hennessey is scheduled to be released May 26, 2026, followed by three-year supervised release.

On April 17, Hennessey requested a reduction in sentence for “compassionate release,” asking for home confinement. Hennessey said suffers from Type 1 diabetes and uses an insulin pump. He also has hypertension (high blood pressure), as well as obesity and glaucoma. The warden denied the request April 24.

Failed to appeal

On June 3, Lewis — without knowing about the diagnosis — objected to compassionate release on several grounds. First, he said Hennessey failed to file an administrative appeal with the warden.

Before learning of the diagnosis, Lewis said the prison had many precautions in place. Among other things, they’d stopped social and legal visits in person on March 13, 2020. Further, he said Hennessey failed to demonstrate that he had a terminal illness or a condition that diminishes ability for self-care “within the environment of a correctional facility.”

Hennessey would need to prove “more than a mere speculation of the possibility of contracting the virus,” Lewis said. Diabetes increases the risk of complications from the disease, but not the risk of contracting it, he added.

Hennessey still poses a “threat to the community,” Lewis said. After stealing money from his co-op owners, “He spent their money on lavish, frivolous, and garish purchases and pursuits,” Lewis said, adding, “The majority of his pilfered bounty will almost certainly never be repaid.”

Hennessey is less than two years removed from committing active fraud. “When that fraud was first uncovered, he ran,” Lewis said. The judge needs to consider the “length and brazenness” of his crime, and the fact that it was committed from “a position of trust and authority.” The judge should deny the petition because it creates a disparity” between Hennessey and others who have committed equal or smaller crimes.

Lewis acknowledged courts have allowed compassionate release, but mostly when inmates are over 65 years old, are serving a short sentence, or have served most of a longer one and don’t present a danger to the community.

Bookkeeper's case

In other related developments, Kimberly Marie Dysthe Goeden, 47, a bookkeeper who worked for Hennessey, of Fergus Falls, is scheduled for a plea hearing on Aug. 3, via video in Grant County at Elbow Lake, Minn.

Prosecutor John R. Anderson on Dec. 26, 2019, filed charges against Goeden, alleging she improperly wrote more than $88,000 in unauthorized checks from the co-op for her own benefit.

At that time, the maximum sentence was set at 20 years in prison plus a $100,000 fine.

According to charges, Goeden wrote unauthorized checks from Dec. 30, 2014, until Aug. 28, 2018, just at the point that the Hennessey case was coming to light. There were 22 checks for “cash” for a total of $44,522, and 65 other checks totaling $40,511.84. Like Hennessey, Goeden would label the checks as though they were for “soybeans,” “feed,” or other commodities.

Immediately after Hennessey’s disappearance, Goeden had worked for the co-op and then for Ashby Grain LLC, which had leased the facility. She continued to work there until early 2019.

Facilities for the defunct Ashby co-op now have been sold to Ashby Grain LLC, a wholly-owned subsidiary of Wheaton-Dumont Cooperative Elevator. Philip Deal, general manager of the Wheaton-Dumont Cooperative Elevator, confirmed that the transfer occurred sometime in March.