By Lori Ehde
Former Rock County Land Management Director John Burgers was sentenced Monday for his role in soliciting and receiving bribes from the Pipestone hog operation, Global Ventures Inc.
Despite the seriousness of the felony-level crime, Burgers' illegal actions were minor in relation to the sophisticated bank fraud conspiracy that centered around Global Ventures.
His sentence of five months in a halfway house and five months home detention is also light, compared with those levied against the ring leaders of the scheme.
Burgers appeared in U.S. District Court Monday for sentencing along with Global Ventures representatives and six Pipestone community leaders and businessmen, all involved in wide-ranging fraudulent conduct.
Two-year probe
reveals $13 million
in illegal loans
The orchestrated fraud schemes added up to more than $13 million of illegal loans made by a former president and director at First National Bank, Pipestone.
They also involved bribes taken by former officials with the City of Pipestone and Rock County; a ghost company created to deceive federal bank regulators; and lies to an FBI agent investigating corruption and bribes in the Pipestone area.
"Public corruption is at the heart of all the crimes for which these defendants were sentenced. As such, all the people of Pipestone and Rock County were the victims of these defendants' illegal conduct," U.S. Attorney Tom Heffelfinger said.
"We are very pleased that we were able to resolve this case in a manner that sends a strong message that public corruption will not be tolerated in Minnesota, and that ensures that the people of Pipestone and Rock County are partially and directly compensated for the damage done by their former community leaders."
The sentence orders for all involved parties were signed by Judge Michael Davis.
David S. Logan
David S. Logan, former Pipestone City Administrator and former CEO of Global Ventures I Inc., was sentenced to 71 months in prison and five years supervised release, which was the top of the sentencing guideline range. He was also ordered to pay a $250,000 fine, a $250,000 personal money judgment in forfeiture, and $100,000 in restitution to Nelson Minnesota Farms.
Under terms of his plea agreement, Logan also was ordered to pay the following in extraordinary restitution: $160,000 to the Minnesota Board of Soil and Water Resources and Rock County for the purpose of conducting a Level 3 feedlot inventory in Rock County; $55,000 to Pipestone County to augment current and planned county expenditures for feedlot technical assistance, feedlot upgrade cost sharing, and soil erosion prevention; $20,000 to the Midwest Environmental Enforcement Association for two environmental enforcement training seminars; $10,000 to Lincoln-Pipestone Rural Water System to augment current and planned system expenditures for ground water monitoring; and $5,000 to the Minnesota Office of Environmental Assistance for providing small grants for the implementation of environmental education programs.
Logan will surrender for service of his sentence on Aug. 9.
Logan, 54, from Pipestone, pled guilty in April to one count of conspiring to defraud the United States, one count of misapplication of bank funds, and one count of mail fraud by depriving others of the right to honest services.
Logan admitted that he and Michael Morgan, a former president and director of the First National Bank, Pipestone, conspired to violate banking regulations regarding lending limits and insider loans when Morgan caused a series of illegal loans to be made to companies controlled or created by Logan, including two in which Morgan also held an interest.
Logan also admitted to soliciting and obtaining a series of bribes and kickbacks, totaling more than $100,000, while he had served as the Pipestone City Administrator.
Michael Morgan,
Morgan was sentenced to 48 months in prison and three years of supervised release. He was also ordered to forfeit $250,000 to the United States, to pay $100,000 in restitution to Nelson Minnesota Farms, and perform 300 hours of community service. He will surrender for service of his sentence on Aug. 9, 2002.
Morgan, age 44, from Pipestone, pled guilty in March to one count of conspiracy to defraud the United States, one count of mail fraud, and one count of misapplying more than $13 million in federally insured bank funds. Morgan's sentence reflected a downward departure from his applicable sentencing guideline range based on his cooperation with the government's investigation.
Morgan, Logan, and others conspired to utilize the $13 million in bank funds for investing in hog production related businesses and concealing those investments from the Office of the Comptroller of the Currency, in violation of banking regulations concerning lending limits and insider loans. Morgan also used the monies to conceal non-performing loans and receive monies for personal investment and payment of personal debt.
William A. Winter,
William A. Winter, a retired Pipestone construction company owner who provided money to Logan for the purpose of obtaining preferential treatment regarding city contracts, was sentenced to two years of probation, pay a $50,000 fine, and serve 300 hours of community service.
Under terms of his plea agreement, Winter also provided $125,000 to the City of Pipestone to purchase four emergency warning sirens, a van, equipment for the city's recreation center, and other necessary equipment and materials; and $50,000 to the Pipestone-Jasper School District to purchase six computer servers. He also agreed to provide construction-related services, without charge, to Habitat for Humanity in Pipestone and Rock Counties.
Winter, age 62, pled guilty in November 2001 to making a false statement to an FBI agent who was conducting an investigation into bribes in the Pipestone and Rock County area. Winter falsely told the agent that he had never given money to Logan, when in fact he had provided money, services and other things of value in order to obtain preferential treatment on bids for job contracts under the control of Logan.