Fremont Man Sentenced for Wire Fraud
United States Attorney Deborah R. Gilg announced that Thomas J. Herink, age 46, of Fremont, Nebraska, was sentenced on June 21, 2012, in Omaha, to 18 months in prison by United States District Judge Joseph F. Bataillon, for Wire Fraud. After his release from prison, Herink will be required to serve a 3 year term of supervised release. Herink was also ordered to make restitution in the amount of $5,111,026.91 to all of his victims.
Thomas J. Herink was a resident of Fremont, Nebraska, and President and Chief Executive Officer of Golf Services Group, Inc., a Nebraska corporation with its principal place of business in Fremont, Nebraska.
United Fire and Casualty Company (UFCC), based in Cedar Rapids, Iowa, and Employers Mutual Casualty Company (EMCC), based in Des Moines, Iowa, were insurance companies that provided various insurance products, including surety bonds, to construction contractors. These bonds, which included bid, performance, and payment bonds, guaranteed that the contractor would fulfill his commitments according to the specifications outlined in the construction contracts. Both UFCC and EMCC provided bid, performance, and payment bonds to Thomas J. Herink and his business entities.
The purpose of the scheme and artifice to defraud was for Thomas J. Herink to unjustly enrich himself by applying for loans and obtaining construction bonds for GSGI and his other business entities. The essence of the fraud was that Thomas J. Herink provided materially false financial statements to TFS, UFCC, EMCC and UMB Bank, in support of obtaining various loans and construction bonds respectively for GSGI and its subsidiaries, for the purpose of allowing Herink and his business entities to participate in large construction contracts throughout the United States. Ultimately, Herink defaulted on some of the projects, causing TFS, EMCC and UFCC to lose millions of dollars. Had TFS, EMCC and UFCC known that Herink was providing materially false financial statements, TFS and UMB would not have provided him loan funds, nor, would EMCC or UFCC have provided him contract construction bonds for his construction projects.
This case was investigated by the Federal Bureau of Investigation.