A federal jury found former Minnesota Viking Stu Voigt guilty of bank fraud late Friday and found his business partner guilty on all but one of nearly a dozen fraud charges in connection with a scheme prosecutors say bilked investors out of millions of dollars.
Jurors reached a verdict Friday evening after 2½ days of deliberating in U.S. District Court in Minneapolis.
Voigt’s business partner, Jeffrey Gardner, was accused of using money invested in his Hennessey Financial LLC to pay off prior investors and other debts instead of financing real estate projects. Voigt was accused of defrauding a Bloomington bank while serving as its chairman by failing to disclose debts Gardner owed him when Gardner applied for a line of credit.
Voigt was on trial for two counts of bank fraud, and was found not guilty on one of them. Gardner faced multiple charges of mail fraud, conspiracy to commit mail fraud, making false statements on a loan application and bank fraud. Jurors found him not guilty on one of the false-statement charges.
U.S. District Judge Patrick Schiltz will sentence the men at a later date. The bank fraud charge carries a maximum sentence of 30 years in federal prison.
As his business failed, prosecutors said, Gardner continued to paint a rosy picture to potential clients.
One investor was a 90-year-old man who still works part-time at a movie theater because he lost his life savings in Hennessey Financial.
Prosecutors said that money instead helped cover costs of a settlement with Gardner’s ex-wife.
During closing arguments on Tuesday, Assistant U.S. Attorney Robert Lewis told jurors that, despite all the details they heard over six days of trial, the case “boils down to simple fraud.”
Lewis said Gardner stripped Hennessey of its remaining viable assets before it collapsed, depriving its creditors of collateral, and moved the healthy assets to a new company Gardner called “Jeff-What Me Worry?” Lewis said Gardner never told investors that Hennessey Financial was in a hopeless state, nor did he disclose that a hedge fund set up to finance the business planned to foreclose on it in early 2008. “The alternative is just to stop and tell [the investors],” Lewis said.
James Ostgard, Gardner’s attorney, called the case far more complicated. Gardner and his investors were casualties of the housing market crash, he said.
“Why would a guy who spent 30 years … working himself up from nothing, why would he then spend five years scheming to defraud his family, his childhood friends, his cherished benefactor, First Commercial Bank, for that matter, so he could give it all to [a hedge fund]?”
Ostgard said Tuesday. “That has to be the dumbest scheme to defraud I’ve ever heard.”
Lewis said Voigt and Gardner defrauded First Commercial Bank in Bloomington, where Voigt was chairman, when they didn’t disclose that Gardner owed Voigt $4.5 million as he applied for a line of credit that the bank approved.
Andrew Birrell, one of Voigt’s two attorneys, told jurors that Voigt acted in good faith and with no intent to defraud anyone. He said a document from Gardner’s presentation to the bank included a note that Gardner’s statement didn’t include liabilities of $12 million.
He asked why Voigt, “the guy with the biggest share in the bank,” would defraud it.
“It’s appalling that he is even here,” Birrell said. “He’s faced this matter with a great deal of courage.”
Federal prosecutors brought the charges against Voigt last April, less than a year after he settled a lawsuit brought in 2011 by former teammate Ron Yary. Yary, who starred with Voigt on ’70s-era Vikings teams that went to three Super Bowls, maintained that Voigt conned him and three others out of $1 million.
Longtime pro wrestling announcer Ken Resnick, who once called Voigt a friend, was also part of that suit, along with his late mother.
Resnick said news of the verdict left him emotional.
“I wish more of the 36 counts Stu Voigt was originally facing had carried through to trial, but it’s gratifying to know that the jury saw through the defense his attorneys tried to put forth,” Resnick said. “I hope they’ll be going to prison, because that’s where they belong.”
Stephen Montemayor 612-673-1755