Federal Jury Finds North Oaks Man Guilty Of Defrauding Investors Out Of $1.5 Million In Wind Energy Project
MINNEAPOLIS—Yesterday in federal court, a jury found a 52-year-old North Oaks man guilty of defrauding investors to persuade them to invest in a purported wind energy project. Instead of building the wind energy project, the defendant used the investors’ $1.5 million to pay for his personal expenses and his other wind energy projects. On April 1, 2014, following a six-day trial, the jury convicted Gregory Joseph Jaunich on five counts of mail fraud. Jaunich was indicted on July 16, 2013.
According to the evidence presented at trial, from October 2006 through January 2007, Jaunich solicited funds from individual investors and investor groups for the purchase of membership units in Averill Wind, a company Jaunich created to develop and operate a wind energy project in Clay County, Minnesota. To induce these investments, Jaunich made false material representations concerning the project’s status, including telling them that the project was closer to completion than what was actually the case. In addition, Jaunich failed to disclose that at the time he was soliciting investments in Averill Wind, he was under criminal investigation by federal law enforcement for fraudulently overbilling Xcel Energy for wind energy production.
From October 2006 through January 2007, Jaunich received more than $1.5 million from investors. Jaunich told investors that the funds would be used to develop, operate and maintain the Averill project. Instead, Jaunich diverted almost all of the funds to his own personal use, to pay personal expenses and debts, and to pay expenses and debts relating to other wind energy projects. To keep the scheme from being discovered, in April 2007 and June 2008, Jaunich mailed letters to the investors containing false information about the status of the Averill Project and the use of the investors’ money via the United States Postal Service.
For his crimes, Jaunich faces a potential maximum penalty of 20 years in prison on each count. U.S. District Judge John R. Tunheim will determine his sentence at a future hearing, yet to be scheduled. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant U.S. Attorneys Kimberly A. Svendsen and John Kokkinen.
To learn more on how to protect yourself from mail fraud, visit http://www.stopfraud.gov/protect-massmarket.html.