Former Grain Elevator Manager Sentenced To 96 Months In Prison For $5 Million Fraud Scheme, Tax Evasion

United States Attorney Erica H. MacDonald today announced the sentencing of JEROME ROBERT HENNESSEY, 56, to 96 months in prison for mail fraud and income tax evasion. HENNESSEY, who pleaded guilty on February 14, 2019, was sentenced earlier today before Chief Judge John R. Tunheim in U.S. District Court in Fergus Falls, Minnesota.

“As a manager, Mr. Hennessey held a position of trust over the Co-op’s members and their financial interests. Unfortunately, he chose to violate that trust by committing an egregious fraud, stealing from his own colleagues, friends, and neighbors,” said U.S. Attorney Erica MacDonald. “This case has had a significant impact on the Ashby community and its industry. Today’s sentencing is a just outcome and a demonstration of the U.S. Attorney’s Office’s commitment to protecting Minnesotans from all types of crime – including financial crimes.”

According to the defendant’s guilty plea and documents filed in court, from 1988 until September 2018, HENNESSEY was an employee of the Ashby Farmers’ Cooperative Elevator Company (“the Co-op”). Beginning in 2003, HENNESSEY began using his position as the general manager to steal millions of dollars from the Co-op. HENNESSEY wrote hundreds of checks to himself and to third parties for, among other things, renovations and improvements to his residence and a cabin, the purchase of real estate, furniture, jewelry, all-terrain vehicles, outstanding credit card balances, property taxes, expensive hunting trips, taxidermy services, and the shipping costs for animals he had killed during the hunting trips.

According to the defendant’s guilty plea and documents filed in court, HENNESSEY attempted to disguise the payments by writing descriptions on the carbon copies of the checks falsely indicating that the checks were for the purchase of corn and soybeans or other legitimate expenses. HENNESSEY then provided the carbon copies to the Co-op’s bookkeeper, thus ensuring that the Co-op’s accounting records would give the false impression that the funds had been used for legitimate purposes. In order to make sure that the Co-op had sufficient funds to cover its legitimate expenses and to cover the millions of dollars that HENNESSEY stole, HENNESSEY obtained a line of credit for more than $7 million. In total, HENNESSEY stole approximately $5,338,922.21.

This case was the result of an investigation conducted by the Internal Revenue Service-Criminal Investigation Division, the Grant County Sheriff’s Office, and the Minnesota Bureau of Criminal Apprehension.

Assistant U.S. Attorney John Kokkinen prosecuted the case.

Defendant Information:

JEROME ROBERT HENNESSEY, 56

Dalton, Minnesota

Convicted:

• Mail fraud, 1 count
• Income tax evasion, 1 count

Sentenced:

• 96 months in prison
• Three years of supervised release
• $5,338,922.21 in restitution to Ashby Farmers’ Cooperative Elevator Company

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United States Attorney’s Office, District of Minnesota: (612) 664-5600