Ex-grain elevator manager sentenced to 8 years in prison for embezzlement
A federal judge on Friday sentenced a former grain elevator manager to eight years in prison for stealing millions of dollars from the business over the course of at least 15 years.
Jerome R. Hennessey, 56, of Dalton, Minn. ran the Ashby Farmers' Cooperative Elevator Company from 1988 until last fall. That's when authorities say a bank called in a loan, and Hennessey's embezzlement scheme came to light.
Hennessey disappeared for several months, but resurfaced in December 2018 when federal prosecutors in Minneapolis filed charges of mail fraud, and later tax evasion.
According to court documents, Hennessey wrote hundreds of checks to himself and others, drawn on co-op accounts. He used the money for personal expenses including home renovations, all-terrain vehicles, hunting land, international hunting trips and shipping and taxidermy costs for the animals he had killed.
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Prosecutors say he provided carbon copies of the checks to the co-op's bookkeeper and included handwritten notes indicating that the funds were for legitimate expenses such as the purchase of soybeans, corn and feed. From 2003 through 2018, Hennessey wrote fraudulent checks totalling $5.3 million.
Authorities also say Hennessey falsified his tax returns from 2011 through 2017, underreporting $1.6 million in income.
Filings in federal court say Hennessey's fraud was discovered when a bank that had issued the co-op a line of credit asked for the money to be repaid. Hennessey secured the $7 million loan by claiming that the co-op had $7 million worth of grain on hand as collateral. In reality, the co-op had just $50,000 in its possession.
Hennessey agreed to meet with the co-op's board on Sept. 10, 2018, but he did not show up for the meeting. Investigators say he fled to Iowa before agreeing to surrender to law enforcement.
During a hearing in Fergus Falls, Minn., Judge John Tunheim also ordered Hennessey to pay the co-op $5.3 million in restitution. Hennessey's eight-year prison term is near the top of sentencing guidelines.