The Dalton, Minn., man accused of stealing nearly $5 million from a small-town grain elevator fled Minnesota earlier this fall and hid out for three months “to get his head clear,” his lawyer said Thursday.
Minneapolis attorney Thomas Kelly said Jerry Hennessey, the former manager of the Ashby Farmers Cooperative Elevator Co. in Ashby, Minn., never left the country after skipping town Sept. 10, but he wouldn’t disclose details on Hennessey’s whereabouts after he vanished.
“He needed to get away to get his head clear and deal with the enormous problems he had,” Kelly said. “It’s a rather mundane explanation. Nothing exotic.”
Hennessey, 56, turned himself in to federal authorities on Tuesday and was charged in U.S. District Court with a single count of mail fraud. He and his wife, Rebecca, also face a lawsuit in Grant County alleging that they stole more than $4.9 million over the past 15 years from the grain elevator that Hennessey managed for nearly 30 years.
The Hennesseys allegedly spent the ill-gotten money on exotic hunting safaris, taxidermy, home improvements and personal credit card debt. Rebecca Hennessey, who has since filed for divorce, has not been charged with a crime.
Erik Ahlgren, a Fergus Falls lawyer who is representing the co-op, said his unofficial tally of missing co-op money has risen to $5.5 million since the civil suit was filed.
Hennessey’s alleged scheme began to crumble when an $8 million loan to the co-op came due on Sept. 1 from CoBank, a federal agency that makes loans to agricultural co-ops. The Ashby elevator didn’t have assets to back the loan, and the board began asking questions of Hennessey, who said he was refinancing the loan.
The board called a meeting for Sept. 10 to discuss the issue. Hennessey disappeared that day and wasn’t seen until he turned himself in this week. In a court affidavit, a federal investigator said a friend of Hennessey’s drove him to Des Moines early the morning of the board meeting and let him off on the side of the road.
Kelly said Thursday that Hennessey turned himself in promptly when he learned that authorities might be building a criminal case against him.
“As soon as he heard that there might be subpoenas out for a grand jury appearance, he secured my representation and we contacted the U.S. Attorney’s office,” Kelly said. “He responded immediately when he became aware that there were potential criminal charges being brought by the U.S. government.”
Hennessey decided late last week to turn himself in, Kelly added.
Despite fleeing when his alleged scheme was discovered, Hennessey was released Tuesday on $25,000 bail, with restrictions that include electronic monitoring. Kelly said Hennessey was not considered a flight risk under federal court guidelines, which use data algorithms to assess each defendant seeking bail.
He said that based on that, Kelly was less than “a 1 percent” flight risk. “So those are pretty good odds — a 99 percent chance that he’ll show up,” Kelly said. “He wasn’t treated differently than anyone else.”
Kelly added that the conditions of Hennessey’s bail will allow him to be available to assist authorities in the liquidation of his assets, which are expected to be seized to pay back some of what he allegedly owes the elevator co-op.
Kelly called Hennessey’s case “interesting,” adding that he expects that he and Hennessey will be “required to meet for further discussions with the U.S. Attorney on a relatively quick basis.”
He hinted at the possibility that the case could be resolved through a plea bargain.
“It doesn’t appear to be a case that would inevitably proceed to trial,” he said.
Many have questioned how Hennessey could have pulled off such a long-running scam. Ahlgren said the co-op had “poor internal controls.” And Hennessey, a longtime employee, had a reservoir of trust and good will to draw on.
“He was a con man,” Ahlgren said. “And ‘con man’ is short for ‘confidence man.’
“He gained their confidence and then he stole from them.”