Tuesday, October 23, 2018

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Businessman to plead guilty in WEDC fraud scheme

MADISON — A De Pere businessman charged with defrauding the state’s economic development agency and several other investors out of more than $9 million, more than $1 million of it from state taxpayers, will plead guilty on Friday to one count of wire fraud, according to a plea agreement filed Tuesday by federal prosecutors in Green Bay.

Prosecutors also agreed to recommend to U.S. Chief Judge William Griesbach that Ronald H. Van Den Heuvel, 64, be sentenced to 7½ years in prison, concurrent to a three-year prison sentence that he received in January for defrauding the Horicon Bank out of more than $700,000 starting in 2008.

Van Den Heuvel and his lawyer are free under the agreement to ask for any other sentence. The maximum sentence for the crime to which Van Den Heuvel is pleading guilty is 20 years in prison.

The remaining 13 counts against Van Den Heuvel would be dismissed under the plea agreement. Van Den Heuvel will formally enter his guilty plea on Friday in U.S. District Court in Green Bay.

The case against Van Den Heuvel, and in particular the Wisconsin Economic Development Corp.’s write-off of a $1.1 million loan to Van Den Heuvel, was criticized by Democrats as evidence of mismanagement of the agency by the administration of Republican Gov. Scott Walker.

The Van Den Heuvel loan was one of several botched WEDC deals reported on by the Wisconsin State Journal and other news outlets in 2015 that prompted a review of agency practices and a temporary suspension of the agency’s loan program.

In September 2017, Van Den Heuvel, owner of Green Box NA, was charged in a 14-count indictment with 10 counts of wire fraud and four counts of money laundering. WEDC’s $1.1 million loan was supposed to help the company create 116 jobs by December 2014 as part of a project valued at more than $13 million to turn fast-food wrappers and other waste paper into synthetic fuel and paper products, all through an environmentally sound process that was touted to produce no waste.

An indictment stated that Van Den Heuvel persuaded WEDC and other investors to give him money by falsely claiming that he had entered into agreements with major companies to advance Green Box’s operations and that he produced false financial statements that grossly inflated his personal wealth and financial situation.

Under the plea agreement, Van Den Heuvel agreed to pay at least $9.4 million in restitution to lenders and investors.

In July, Van Den Heuvel was ordered sent to jail by a federal judge after U.S. Attorney Matthew Krueger presented evidence showing that he had continued to live a lavish lifestyle while free, even as he failed to repay creditors and requested legal representation by a federal defender instead of a private attorney paid from his own pocket.

But the plea agreement states that Van Den Heuvel “understands that because restitution for the offense is mandatory, the amount of restitution shall be imposed by the court regardless of the defendant’s financial resources,” and states that he agrees to cooperate in efforts to collect the restitution that he owes.

Van Den Heuvel also acknowledged that paying restitution won’t restrict or preclude the filing of civil lawsuits against him, the plea agreement states.

An addendum to the agreement states that had the case gone to trial, prosecutors would have been able to prove that Van Den Heuvel began promoting his Green Box business plan in early 2011, in order to get money from lenders and investors.

But once he had the money in hand, prosecutors said, he misused it, then took steps to conceal the misuse from lenders and investors. Some of one acquaintance’s $600,000 investment, for example, was used to buy $19,184 in Green Bay Packers tickets, $100,000 of it went toward settling an old legal dispute, $57,777 went to court-ordered support payments for his ex-wife and $6,409 went to the mortgage on a home in Florida.

Prosecutors said that of $3.1 million Van Den Heuvel received from a Montreal-based private equity firm, much of the money went toward Van Den Heuvel’s personal expenses, including support for his ex-wife, a Cadillac Escalade and other expenses.

The wire fraud charge to which Van Den Heuvel agreed to plead guilty relates to a $1 million wire transfer in September 2012 by the private equity firm, Cliffton Equities, to a bank in Manitowoc.

The $1.1 million loan from WEDC, along with a $95,000 grant, was also used in part to make court-ordered payments to his ex-wife, and $45,000 went to settle a lawsuit by a former nanny.

To get the WEDC loan funds, prosecutors said, Van Den Heuvel had to show that Green Box had acquired an EcoFibre facility in De Pere and bought equipment to produce marketable pulp and other products, and provide documentation that VHC Inc., a company controlled by Van Den Heuvel’s brother, had made a $5.5 million capital contribution to the project.

But in fact, Green Box had not acquired the EcoFibre facility. Prosecutors said that instead the facility had gone into foreclosure and was obtained by VHC. WEDC stated that it would not have authorized the loan or disbursement of funds from it had it known of Van Den Heuvel’s false statements.

In addition, a group of Chinese investors lost nearly $4.5 million that it invested with Van Den Heuvel.

Tribune News Service


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