ASHBY, Minn. — The attorney for creditors of the defunct Ashby (Minn.) Farmers Cooperative Elevator has asked for a summary judgment in a lawsuit against Jay Link and Link’s Wild Safaris — one of several big game safari services for former manager Jerome “Jerry” Hennessey.
Erik Ahlgren is the trustee for the benefit of the creditors of the co-op that received co-op checks at the direction of Hennessey, who is in federal prison for fraud. The co-op, which was in operation for 81 years, abruptly was closed in September 2018, when Hennessey’s thefts were discovered.
Hennessey embezzled more than $5 million from 2003 to 2018, spending it on big game and safaris around the world. The new motion offers new details on how the fraud was perpetrated.
Besides hunting guides and services, Hennessey used some of the embezzled funds to renovate his residence and a cabin, purchase land and all-terrain vehicles, and pay credit card balances and property taxes.
Lawsuits still remain on five safari company cases, one taxidermy case, three credit card cases and three construction cases. Some cases involving safari guides in New Zealand and South Africa have been dismissed for jurisdiction issues.
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Ahlgren’s latest motion in the Link case alone was filed Feb. 22, 2021, in U.S. District Judge John R. Tunheim's court in Minneapolis. Link has not replied yet, but has 21 days to do so.
“Because the defendants improperly accepted checks from an entity that did not owe them any money, the defendants are now required to return the wrongly-accepted funds and may, if they choose, pursue a claim against Hennessey,” Ahlgren said.
In the case, Ahlgren is suing for the return of fraudulent payments totaling $312,150 made to Jay Link and Link’s Wild Safaris in northwest Wisconsin. The co-op funds paid for trips to Uganda in 2015, Cameroon in 2016 and 2017 and Nepal in 2018, plus 10% interest per annum, going back to January 2019, or about $62,000.
The suit lists 10 transactions from former co-op manager Jerome Robert “Jerry” Hennessey paid to Link from Oct. 30, 2015, to Sept. 28, 2018. The checks ranged from $5,500 to $73,750, and averaged $31,150. Most of the checks later were labeled as soybeans or corn in the company’s books.
The Link linkage
Russell Dewey, president of the board, confirmed payments to Link were unauthorized and undisclosed.
Kimberly Goeden, a bookkeeper for the co-op from 2012 to 2018, in a document in the motion, described how she inputted checks into the accounting software that were in a “review” by an independent accountant. There was never a financial audit.
“I did not understand that Hennessey was having me enter these checks for an improper purpose,” Goeden said.
She said Hennessey would provide her with a copy of the check and handwritten notes instructing her how to code the check.
“Oftentimes, the checks were not entered until the end of the year” by the company’s accounting service. The checks to Link, like many of Hennessey’s other fraudulent checks to safari outfitters, were generally written earlier in the year. The Link checks often were paid with a co-op check, written by Hennessey at an annual convention for Safari International Club in Reno, Nev., or Las Vegas.
They wouldn’t show up in the co-op books until the end of the year, Ahlgren said.
Goeden described how, at the end of a calendar year, Hennessey would tell her to “load out” grain from the co-op accounting system. This meant taking the “inventory and the liability” out of the co-op computer accounting system and transferring it to “paper records kept in folders.”
“When the member/farmer requested payment, the grain attributed to such member/farmer would be loaded back into the computerized accounting system,” she said.
In some cases the farmer “agreed to forego payment in full in exchange for receiving interest payments,” she said. After being “loaded out,” the patron loans were not represented on the co-op balance sheets.
Hennessey “encouraged” farmers to deliver grain and delay receiving payment and offered “free storage” for grain delivered before the end of a year but not paid until after the end of the year, Goeden said.
Goeden said that in fact none of the “free storage” grain was ever held or “stored” for extended periods of time. Instead, Hennessey sold it to bulk grain buyers — larger co-op elevators in the region. Those elevators would routinely pay within seven days, but Hennessey would send Goeden to pick up the checks “so that we would not need to wait for the checks to be delivered by mail.”
Nick Milanowski, section manager for the Minnesota Department of Agriculture’s grain inspection program, said he supervised examinations at the elevator in 2016, 2017 and 2018.
In the 2018 state grain inventory audit, Ahlgren detailed how Hennessey made a “fantastic claim” about 500,000 bushels stored off-site, but the state didn’t physically check them under the co-op’s license.
Hennessey even specified amounts and locations: Corn — 110,967 bushels at a “Hanson” site; 33,933 bushels at a “Schloffeld” site; and 67,352 bushels at a “Stamer” site. Soybeans — 53,541 bushels at “Balgaard” site; 129,103 bushels at a “Gaarsland” site; 39,983 bushels at a “Thorstenson” site.
Later, however, Ahlgren learned that Hennessey provided to CoBank “falsely signed statements purported to be from patrons stating they held grain for the co-op.”
Tim Thompson, the elevator’s operations manager and Hennessey’s son-in-law, in a document in the motion said no grain was stored off-site after a new a new bin was completed in 2013. Goeden said the same.
In a separate, related state civil case, a Grant County District judge found Hennessey and his wife liable for $4.9 million in actual damages to co-op.
In the separate, federal criminal case, Hennessey pleaded guilty to mail fraud and income tax evasion for embezzling more than $5 million from the co-op from 2003 to 2018. He is serving eight years in federal prison in North Carolina and faces the forfeiture of $5.3 million.