Two Minnesota Men Indicted For Conspiring To Defraud Equipment-leasing And Insurance Companies
MINNEAPOLIS—A federal indictment unsealed late yesterday charges two Minnesota men with conspiring to defraud equipment-leasing companies and insurance companies. The indictment, which was filed under seal on June 18, 2013, charges Joseph Michael Hanson, age 54, of Mendota Heights, and Timothy John Lambrecht, age 41, of Medina, with one count of conspiracy to commit mail and wire fraud. The indictment was unsealed following Lambrecht’s initial appearance in federal court on June 20.
During the time relevant to this case, Lambrecht owned and controlled InCompass, Inc., a corporation engaged in the business of providing information technology services to third parties. Lambrecht also owned and controlled TRAC Enterprises, a shell corporation that he purportedly used to perpetrate parts of this fraud scheme. Together, Lambrecht and Hanson owned HLI, which, in turn, owned the building in New Brighton where InCompass operated (the “HLI Building”). The defendants allegedly paid a portion of the fraud proceeds to the lender that financed the defendants’ acquisition of the HLI Building.
As to the fraud, the indictment alleges that between December 2008 and May 2012, the defendants conspired with others to lease or to cause third parties to lease computer equipment at greatly inflated prices to create a pool of funds from which the defendants then paid their personal and business expenses. They also allegedly submitted false claims to insurance companies, claiming their equipment had been stolen.
For example, in December 2008, Lambrecht purportedly caused TRAC to purchase a storage area network (“SAN”) device for $27,700. In February 2009, Lambrecht then allegedly caused Wells Fargo Equipment Finance (“WFEF”) to purchase the SAN from TRAC at the greatly inflated price of $112,300 and then lease it to InCompass. Lambrecht reportedly hid from WFEF that he owned both TRAC and InCompass. He also allegedly misled WFEF into paying for SAN training and consulting services, purportedly worth $28,750, that were never provided. In all, the indictment claims Lambrecht obtained more than $246,179 from WFEF, which he used to prop up InCompass and pay against the loan on the HLI Building.
The indictment also alleges that in July 2010, Lambrecht falsely reported to his insurance carrier that the SAN had been stolen from InCompass. The defendants reportedly submitted an invoice to the insurance company from a business owned by Hanson in support of Lambrecht’s claim for reimbursement of more than $170,000 in replacement equipment and data recovery services. Those replacements and services, however, were never purchased or provided. Instead, between July 2010 and January 2011, Lambrecht received more than $498,000 from the insurance company, purportedly depositing the funds into the bank accounts of InCompass and TRAC. And during that entire time, InCompass continued to use the SAN in the course of its business.
In addition, the indictment alleges that on March 25, 2009, the defendants and others caused an entity owned by an unnamed co-conspirator to purchase from InCompass a SAN for approximately $74,100, even though the original purchase price was $22,000. Moreover, on July 21, 2010, an unnamed co-conspirator allegedly made a false claim to another insurance company that the SAN had been stolen from InCompass, leading to an insurance payout of $160,000.
As a result of this alleged fraud conspiracy, WFEF lost at least $100,000 and the insurance companies lost approximately $658,000.
If convicted, the defendants face a potential maximum penalty of five years in prison. Any sentence would be determined by a federal district court judge. This case is the result of an investigation by the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney David J. MacLaughlin.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.