ELBOW LAKE, Minn. — Creditors of the former Ashby Farmers Cooperative Elevator are suing taxidermists for a half-million dollars, claiming they should have realized former elevator manager Jerry Hennessey was improperly paying for mounting trophies using co-op checks.
Lawyer Erik Ahlgren, of Fergus Falls, who serves as the assignee for the benefit of creditors, on Monday, Sept. 16, filed a lawsuit in Grant County District Court in Elbow Lake asking that taxidermist Marvin Gaston, his wife Betty Gaston, and their company, Taxidermy Unlimited Inc. of Burnsville, Minn., pay back $514,435.07 in unauthorized payments from the co-op.
The taxidermist suit adds some detail to an extraordinary grain industry fraud committed by Hennessey, 56, who is now serving an eight-year sentence at a federal prison in North Carolina.
In the lawsuit, Ahlgren says the company is entitled to “recover fraudulent transfers, damages and disgorgement” under the Minnesota Fraudulent Transfer Act, which allows a six-year look-back to 2013.
Hennessey was named manager of the Ashby co-op in 1989. Over the years, Hennessey made some $5.4 million in unauthorized payments from co-op accounts. Much of the money was spent on big-game hunting trips around the globe and taxidermy services.
Hennessey had been using Taxidermy Unlimited services since 2009. He initially paid for the services with a Cabela’s Club Visa credit card, which he, in turn, paid for with co-op funds.
‘Should have known’
Between 2013 and 2017, Hennessey wrote $416,245 in co-op checks payable personally to Marvin Gaston. The 12 checks internally were labeled as corn, soybeans or seed and were for up to $75,000 each.
In the suit, Ahlgren says the Gastons “knew or should have known that they were taking checks from an agricultural cooperative, for expenses unrelated to the business of the cooperative. Further, the Gastons accepted funds for Taxidermy Unlimited gift certificates that were donated to Safari Club International and Minnesota Safari Club International as prizes in a club drawing.”
Also, the Gastons accepted co-op funds which Betty transferred by wire to various safari hunting guides and for shipping of “animal skins, hides and heads from Uganda, New Zealand, Spain and South Africa.”
In the lawsuit, Ahlgren also says that Betty Gaston helped Hennessey in his scheme to purchase hunting property in Kanabec County on Oct. 9, 2013. The day before, he requested Betty obtain a cashier’s check of $98,190.07 payable to a title company. Betty then accepted co-op money as “reimbursement,” according to the suit.
The Gastons in April made an appointment to be interviewed by Agweek, but then rescinded the appointment.
On Feb. 14, Hennessey pleaded guilty to federal fraud charges. Separately, on March 15, the co-op in Grant County District Court obtained a $4.9 million state judgment against Hennessey and his wife, Rebecca. In addition to his prison sentence, Hennessey was ordered to pay $5.3 million in restitution.
The co-op’s creditors previously sued some of the guide services Hennessey used on his hunts.