OMAHA (DTN) -- The man accused of stealing millions of dollars from the Ashby Farmers Cooperative in Ashby, Minnesota, has surrendered himself to federal authorities and now faces one count of mail fraud.
Jerome Hennessey, 56, of Dalton, Minnesota, made his initial court appearance in the U.S. District Court for the District of Minnesota in Minneapolis on Tuesday, according to the U.S. Department of Justice.
The former manager of the Ashby cooperative allegedly stole at least $2 million from the elevator from 2003 to 2018, before disappearing in September 2018.
In October, the members of the cooperative voted to dissolve and sell the cooperative's assets. The cooperative has identified $4.9 million in unauthorized checks.
A criminal complaint and a seven-page affidavit filed in court outlines the alleged scheme perpetrated by Hennessey, as well as details about where he has been since the allegations surfaced. Hennessey allegedly racked up millions of dollars in spending on hunting safaris and taxidermy work. He had managed the 307,000-bushel-capacity grain elevator since 1989.
If convicted, Hennessey could face up to five years in prison and a $250,000 fine.
According to the affidavit, Hennessey allegedly caused the cooperative to make more than $1.1 million in payments to himself and more than $1.1 million in payments to a personal Cabela's Visa card in Hennessey's name. In addition, co-op funds allegedly were spent by Hennessey on hundreds of thousands of dollars in payments for "various expensive hunting trips and taxidermy services," the affidavit said.
"The co-op's records included false descriptions for these various transactions such as 'soybeans,' 'corn,' 'wheat,' and 'seed,'" the affidavit said.
In addition, the affidavit said Hennessey "caused payments from the co-op's account to be sent for Hennessey's benefit to third parties." For example, a check was mailed to someone as a down payment on the purchase of a hunting property, the affidavit said.
The affidavit also details photos and details of hunting trips allegedly taken by Hennessey using hundreds of thousands of dollars in co-op funds.
Erik Ahlgren, an attorney hired by the cooperative, told DTN the cooperative is doing all it can to recover the money from Hennessey. In October the co-op filed a civil suit against him. Ahlgren said the co-op is considering additional lawsuits.
"We expect to obtain assets on behalf of the creditors but we do not expect to obtain sufficient assets to make the creditors whole," he said. "We are hopeful that Mr. Hennessey will cooperate in obtaining assets to repay the creditors but we do not expect Mr. Hennessey's return to have a significant impact on whether we obtain a judgment against him and we will do the best we can, with or without his cooperation, to recover assets on behalf of the creditors."
After the co-op identified the suspicious transactions, the company's board of directors requested a meeting with Hennessey on Sept. 10, 2018, according to the affidavit. Hennessey did not show up for the meeting.
Federal authorities said they learned Hennessey went to a friend's house that day and told the friend "he was in big trouble" and needed help. Hennessey and his friend spent the day driving, according to federal authorities, and on the morning of Sept. 11, the friend dropped him off "on the side of the road somewhere near Des Moines, Iowa," the affidavit said.
Then, on Nov. 30, 2018, federal agents traveled to Des Moines and interviewed another acquaintance of Hennessey's. The person told authorities he had called them asking for help. Hennessey told the friend that he had "gotten greedy and taken a lot of money from his employer."
Beyond what is owed to farmers, the co-op also owes $8 million to the Farm Credit lender CoBank. The cooperative has about 300 members who are defined as having at least $500 in transactions with the elevator during the past year.
Todd Neeley can be reached at firstname.lastname@example.org
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