Feds add tax evasion to charges against former Minnesota elevator manager
MINNEAPOLIS -- The U.S. attorney for Minnesota is charging former Ashby Farmers Cooperative Elevator Co. general manager Jerome “Jerry” Hennessey with two counts of mail fraud, and a new federal income tax evasion charge as authorities investigate allegations that Hennessey used co-op funds to bankroll big-game hunting trips and other personal expenses.
Hennessey “used his position as the manager of the Co-op to obtain a line of credit for the Co-op in the amount of approximately $8 million,” said John Kokkinen, assistant U.S. attorney prosecuting the case, in a filing on Dec. 18.
In the new charges, Kokkinen says Hennessey used the CoBank credit line to cover the fraudulent payments he had made from the elevator.
Hennessey “made numerous misrepresentations to the lender (CoBank) regarding the Co-op’s assets that were to serve as collateral for the line of credit, including the amount of grain the Co-op had in storage,” Kokkinen said, representing the office headed by U.S. Attorney Erica MacDonald. The filing doesn’t specify what the misrepresentations were, or in what amount.
Hennessey had just returned to his home in west-central Minnesota after a hunting trip to Australia when financial problems became apparent at the elevator. He left for Iowa in September and later turned himself in to federal authorities on Dec. 4 in the Twin Cities.
Federal charges were filed Dec. 3. He is out on bond, confined to the state of Minnesota pending further action.
The details of the new charges include that in 2014, Hennessey had filed a false tax return, reporting that he and his wife, Rebecca, had a joint taxable income in 2013 of $97,329 and that their total tax due was $16,189. “In fact, as the defendant knew,” their income was greater than that and that in fact there was “at least $270,000 in additional tax due.”
The co-op earlier filed civil fraud complaints regarding some of the same transactions. Starting in 2003, Hennessey is accused of knowingly defrauding the co-op of millions of dollars over 15 years by writing checks to himself and others for his own benefit.
Kokkinen says that “well over 100 checks” were to pay Hennessey’s personal credit cards, or to make personal purchases for domestic and international hunting trips, taxidermy, freight for the shipment back to Minnesota of numerous animals he had killed during overseas hunting trips, home improvements, jewelry and other expenses.