Minnesota ag co-op’s suit seeks $9.8M from former manager, wife
ASHBY, Minn. -- Both the grain elevator general manager and his wife went on an Australian safari hunt within 30 days of a multi-million fraud that forced the Ashby Farmers Elevator Cooperative to sell out and dissolve, officials say in a complaint.
The elevator’s lawyer, Erik Ahlgren, of Fergus Falls, on Oct. 16 filed a civil complaint with Grant County District Court asking for $9.8 million in actual and punitive damages.
The co-op details $4,900,186.72 in unauthorized amounts by former general manager Jerry Hennessey. It says his wife, Rebecca “Becky” Hennessey, “knowingly received the benefits” and also is responsible.
The couple has a home near Dalton, between Fergus Falls and Ashby.
A criminal complaint initially was made with the Grant County sheriff, but since has been forwarded to the U.S. Attorney’s office in St. Paul.
Ahlgren has tracked down that both Jerry and Becky went on Australian safari hunting trip in late August, just prior to co-op officials discovering the alleged fraud Sept. 12. The co-op says in the complaint that it believes the two had been on a separate trip to New Zealand in 2013, both “paid for in whole or in part with funds from the Co-op.”
The co-op is suing Jerry Hennessey for $4.9 million in “actual damages” for “conversion, civil theft and unjust enrichment” and Becky the same amount in actual damages based on “unjust enrichment.” Ahlgren is asking the judge to award punitive damages of double the actual damage, bringing the grand total to just over $9.8 million.
Jerry Hennessey was the co-op’s general manager for about 30 years, from 1989 until he was suspended and fired Sept. 12, 2018. According to the complaint, Becky Hennessey had been “previously employed” at the co-op and continued to list herself as “business manager” on her LinkedIn online professional profile. (Elevator officials said they believe she has “not been employed outside of the home for several years.”)
The co-op earlier said the first evidence of unauthorized funds was in 2003, but added new details. “The first checks were written directly to him, and were coded as feed purchases, but Mr. Hennessey never sold feed to the Co-op,” the complaint says.
On Dec. 30, 2005, Hennessey wrote a $4,500 check to Mulehead Ranch, which was coded as a wheat purchase. Mulehead Ranch is advertised on the internet as a big game ranch in Bonesteel, S.D.
In May 2007, Hennessey started writing checks to pay personal credit card bills including more than $1 million to a Cabela’s Club Visa Card. The personal credit card bills went from 2007 to 2018 and were “ordinarily coded as purchases of soybeans, wheat or corn to disguise their true nature.”
Also, Hennessey wrote more than $2 million in co-op checks to pay personal bills for hunting expenses.
“Just like with the credit card bills, the hunting expenses were coded as purchases of soybeans, wheat, or corn to disguise their true nature,” the complaint says.
In addition, starting Dec. 31, 2011, Jerry Hennessey paid “at least $210,000 in construction expenses unrelated to the Co-op … all of which were falsely coded as purchases of soybeans, wheat or corn.” Also, from 2003 to 2018, he wrote more than $1 million in checks “directly to himself” to “benefit both Jerry and Becky.”
Again, the checks were “generally coded as purchases of soybeans, wheat or corn,” the complaint says.
Co-op members on Oct. 15 approved the board to sell the company’s assets and dissolve the co-op and pursue a state assignee for the benefit of creditors, who would operate like a bankruptcy trustee does in a federal bankruptcy.