U.S. Department of Justice

United States Attorney
District of Minnesota

Big Lake Man Sentenced for Embezzling $6 Million

A 39-year-old Big Lake man was sentenced yesterday in federal in Minneapolis for embezzling $6 million from a Pennsylvania-based chemical company. U.S. District Court Judge James M. Rosenbaum sentenced Chad Wilfred Jurgens to 63 months in prison on one count of wire fraud in connection to his crime. He also was ordered to pay approximately $6.3 million in restitution. Jurgens was charged on February 26, 2010, and pleaded guilty on April 6, 2010.

In his plea agreement, Jurgens admitted that between January of 2002 and February of 2008, he orchestrated a scheme to defraud the chemical company at which he was employed. During that time, Jurgens worked as a site manager at one of the company’s customers in Bloomington, Minnesota. Jurgen’s job was to manage the sale of chemicals from the chemical company to that customer.

In 2002, Jurgens began misusing his position. Specifically, he directed that the chemical company buy chemicals to fill non-existent orders. Jurgens also directed that those purchase orders be filled through a company he set up, VR Services, which was controlled by a friend. However, VR Services had no chemicals to sell; in fact, the transactions were on paper only.

To further his scheme, Jurgens ordered the chemical company to send checks to VR Services for the chemicals supposedly purchased. Jurgens’s friend then took his cut of that money and remitted the balances to another Jurgen-controlled company, Spence Manufacturing. Jurgens admitted he made use of interstate wire communications to carry out his scheme.

According to court records, the restitution is to be distributed with $1,000,681 going to Seagate Technologies, the chemical company; $1,425,000 to the National Union Fire Insurance Co. of New York; $2,870,000 to Haas Group International of Pennsylvania; and $1,010,605.72 to Chubb and Son and Federal Insurance Co. of New Jersey.

This case was the result of an investigation by the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney John Docherty.

This law enforcement action is in part sponsored by the interagency Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. It includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

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Eric Holder, Attorney General, Chair
 
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What is Financial Fraud?

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