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Minnesota co-op sues Burnsville taxidermist, says it should have suspected fraud

ELBOW LAKE, Minn. -- Creditors of the former Ashby (Minn.) Farmers Cooperative Elevator Co. are suing taxidermists for a half-million dollars, claiming they should have realized former elevator manager Jerry Hennessey was improperly paying for mo...

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Displays in buildings on the Jerry and Rebecca Hennessey acreage in rural Dalton, Minn., show souvenirs in elaborate settings. Hunts and taxidermy were paid for by unauthorized transfers from Ashby Farmers Elevator Cooperative millions across a 15-year period. Photo taken in early December 2018 by Ashley Farmers Elevevator Co-op, for use in court filings. (Photo from Grant County District Court filings.)
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ELBOW LAKE, Minn. - Creditors of the former Ashby (Minn.) Farmers Cooperative Elevator Co. are suing taxidermists for a half-million dollars, claiming they should have realized former elevator manager Jerry Hennessey was improperly paying for mounting trophies using co-op checks.

Lawyer Erik Ahlgren of Fergus Falls, Minn., who serves as the assignee for the benefit of creditors, on Monday, Sept. 16, filed a lawsuit in Grant County District Court in Elbow Lake asking that taxidermist Marvin Gaston, his wife Betty Gaston, and their company, Taxidermy Unlimited Inc. of Burnsville, Minn., pay back $514,435.07 in unauthorized payments from the co-op.

The taxidermist suit adds some detail to an extraordinary grain industry fraud committed by Hennessy, 56, who is now serving an eight-year sentence at a federal prison in North Carolina.


In the lawsuit, Ahlgren says the company is entitled to "recover fraudulent transfers, damages and disgorgement" under the Minnesota Fraudulent Transfer Act, which allows a six-year look-back to 2013.

Hennessey was named manager of the Ashby co-op in 1989. Over the years, Hennessey made some $5.4 million in unauthorized payments from co-op accounts. Much of the money was spent on big-game hunting trips around the globe as well as for taxidermy services.

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Hennessey had been using Taxidermy Unlimited services since 2009. He initially paid for the services with a Cabela's Club Visa credit card, which he, in turn, paid for with co-op funds.

'Should have known'


Between 2013 and 2017, Hennessey wrote $416,245 in co-op checks payable personally to Marvin Gaston for work benefitting Hennessey, "his wife, and his children." The 12 checks internally were labeled as corn, soybeans or seed and were for up to $75,000 each.

In the suit, Ahlgren says the Gastons "knew or should have known that they were taking checks from an agricultural cooperative, for expenses unrelated to the business of the cooperative. Further, the Gastons accepted funds for Taxidermy Unlimited gift certificates that were donated to Safari Club International and Minnesota Safari Club International as prizes in a club drawing."

Also, the Gastons accepted co-op funds which Betty transferred by wire to various safari hunting guides and for shipping of "animal skins, hides and heads from Uganda, New Zealand, Spain and South Africa."

In the lawsuit, Ahlgren also says that Betty Gaston helped Hennessey in his scheme to purchase hunting property in Kanabec County on Oct. 9, 2013. The day before, he requested Betty to obtain a cashier's check of $98,190.07 payable to a title company. Betty then accepted co-op money as "reimbursement," according to the suit.

The Gastons in April made an appointment to be interviewed by Agweek, but then rescinded the appointment. They called the Burnsville police to remove Agweek reporter Mikkel Pates, who was voluntarily leaving from the parking lot of their retail store.


Ahlgren contends the co-op was actually insolvent when Hennessey made the fraudulent transactions.

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Ahlgren said Hennessey fraudulently overstated the value of the grain and product inventory, "failing to fully disclose accounts payable" for grain delivered and valuing equity in other co-ops based on their projected value instead of their current fair market value.

The co-op owed $7.3 million on an operating line of credit to Colorado-based CoBank (successor to the St. Paul Bank for Cooperatives) when Hennessey temporarily disappeared in September 2018.

On Dec. 31, 2018, Ahlgren was named assignee, or a receiver, working to find company assets on behalf of the co-op, which went insolvent.

On Feb. 14, Hennessey pleaded guilty to federal fraud charges. Separately, on March 15, the co-op in Grant County District Court obtained a $4.9 million state judgment against Hennessey and his wife, Rebecca. In addition to his prison sentence, Hennessey was ordered to pay $5.3 million in restitution.

The co-op's creditors previously have sued some of the guide services Hennessey used on his hunts.

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