Assistant U.S. Attorney Julie Allyn warned jurors in a Minneapolis courtroom Tuesday that they would be wading through bank statements, invoices and other records in the trial of a former Twin Cities couple and their friend who allegedly participated in an elaborate kickback scheme.
But the paperwork boils down to a case of a couple of employees stealing from their employer and then concealing the money from the government to avoid paying taxes, Allyn said.
"Greed and arrogance, that's why you are here today," she told jurors in the courtroom of U.S. District Judge Patrick Schiltz.
Clayton "Craig" Hogeland, 41, now of Aurora, Texas, and his friend Jeffrey Cole Bennett, 51, of Arlington, Tenn., are charged with a mail fraud and money laundering conspiracy and tax evasion. Hogeland's wife, Jennifer Rose Hogeland, 38, faces charges of aiding and abetting tax evasion.
Prosecutors say Craig Hogeland and Jeffrey Bennett defrauded their employer, Advantage Transportation of Eagan, of more than $660,000.
Allyn described the alleged scheme. She said Hogeland hired Bennett to set up an office for Advantage in Memphis. He created four companies -- three of them shams -- and had them bill Advantage Transportation for products, most of which were never provided. Hogeland approved payment and Bennett paid the Hogelands kickbacks, which Jennifer deposited into their bank accounts.
Allyn showed jurors photos of addresses where Bennett's firms supposedly were located, including a trailer in Arizona where his parents lived.
Craig Hogeland also allegedly set up a phony consultant scheme, paying two American Airlines workers $25 to $50 a load for anything they shipped via Advantage, Allyn said.
Defense attorneys told jurors a different tale brimming with retribution by a spurned boss, and a rough-and-tumble shipping industry rife with what they called "brother-in-law deals" that reward fixers for arranging contracts.
"This prosecution is the biggest double-cross you ever saw," said John Brink, who represents Craig Hogeland.
Craig Hogeland was general manager of Advantage Transportation, which connects freight companies with trucking firms nationwide. It's part of the Dart Transit Co. founded in 1934 by Earl Oren.
Brink said profits tripled at Advantage in the several years that Hogeland led the company. But when he left to start his own competing firm in Dallas six years ago, Advantage president Don Oren, 80, vowed to crush him, Brink said. "It's a highly competitive business and it's run by tough guys," he said.
James Thomas, one of several attorneys from Memphis representing Bennett, asked jurors whether such capable businessmen would leave such an ample paper trail if they were engaged in fraud. He said every business Bennett created had a legitimate purpose, and every payment authorized by the company.
Attorney Daniel Gertz, of Minneapolis, told jurors that his client, Jennifer Hogeland, is a homemaker who takes care of her son from a previous relationship and two adopted children, ages 6 and 8. The government is accusing her of breaking the law because she paid more attention to the process of adopting two children than she did to her tax forms, Gertz said.
Dan Browning • 612-673-4493