A Fremont, Neb., man has been sentenced to 18 months in federal prison for a wire fraud conviction that cost banks and insurance companies in Nebraska and Iowa millions of dollars.
Thomas Herink was sentenced in Omaha’s U.S. District Court. In addition to prison, Herink was given three years of supervised probation following his release and ordered to repay $5,111,026.91 to his victims.
Herink was president and chief executive officer of Golf Services Group Inc., a construction company, according to U.S. Attorney Deborah Gilg, who says Herink falsified financial statements to defraud lenders and insurers.
Herink carried out the scheme in order to participate in large construction contracts throughout the country, according to Gilg. Prosecutors say when Herink defaulted on some of the projects, the banks and insurance companies lost more than $8 million.
United Fire and Casualty Co. (UFCC), based in Cedar Rapids, Iowa, and Employers Mutual Casualty Co. (EMCC), based in Des Moines, Iowa, were insurance companies that provided various insurance products, including surety bonds, to construction contractors, the U.S. attorney’s office said. These bonds, which included bid, performance, and payment bonds, guaranteed that the contractor would fulfill his commitments according to the specifications outlined in the construction contracts. Both UFCC and EMCC provided bid, performance, and payment bonds to Herink and his business entities, according to Gilg’s announcement.
Source: U.S. Attorney’s Office, Associated Press