Chaska man faces fraud, tax charges in ConServe case

Article by: DAN BROWNING , Star Tribune
Updated: December 14, 2010 - 9:35 PM

Kenneth R. Hasse is the second executive charged in an $8 million Ponzi scheme.

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The founder and chairman of the bankrupt ConServe Corp. was charged Monday in U.S. District Court in Minneapolis in an alleged Ponzi scheme the government says bilked more than $8 million from investors.

According to the charges, Kenneth R. Hasse, 61, of Chaska, raised the money for the Minnetonka-based firm between October 2004 and Feburary 2007, stating falsely that it would be used to install electrical sub-metering devices on apartment buildings. ConServe filed for Chapter 7 bankruptcy protection in June 2008.

Hasse also was charged with under-reporting his income for tax purposes.

The charging document was filed as an "information" rather than by a grand jury indictment, which generally indicates a plea agreement is expected.

Wayzata resident David Hugh McCaffrey, 66, the former CEO of ConServe, was sentenced last week to 30 months in prison for his role in the scheme. His lawyer said the scheme had been underway for several years before McCaffrey joined the company.

U.S. District Judge Patrick Schiltz credited McCaffrey with helping the government in its ongoing investigation of Hasse and others who haven't been publicly identified.

Dan Browning • 612-673-4493