OMAHA, Neb.—Former University of Nebraska Regent David Hergert has been charged with 18 counts of bank fraud, marking the latest episode in a string of legal and financial woes following his 2006 impeachment for breaking campaign-finance laws.
The federal indictment announced Friday says the 69-year-old Hergert inflated the assets of Hergert Milling Inc. in order to maintain a $3 million revolving loan through First National Bank of Omaha. The loan was issued in 2000.
Court documents say Hergert’s assets were inflated 18 times between Jan. 31, 2000, and Dec. 14, 2006.
According to the indictment, Hergert would direct employees to “fraudulently and materially manipulate” the value of the feed mill’s assets when preparing required monthly asset statements for the bank. This led the bank to believe Hergert Milling had assets above the value of the loan when, it “in fact, did not have sufficient collateral to support the outstanding loan balance.”
A message left Friday for Hergert at his business number was not immediately returned. Calls to the numbers listed for his home in Mitchell rang unanswered.
Each count of bank fraud carries a maximum sentence of 30 years in prison and a $1 million fine.
U.S. Attorney Joe Stecher said Friday afternoon that a court date for Hergert has not been set.
Federal authorities raided the Scottsbluff and Morrill offices of Hergert Milling in May 2007. Details of the investigation were not released at the time.
Earlier that year, First National Bank of Omaha filed a lawsuit against Hergert, accusing him of defaulting on millions of dollars in loans. It was later withdrawn without prejudice, which means it could be refiled.
First National lawsuit’s named Hergert Milling, Hergert Grain Inc. and H.M. Transportation Cos., which are based in Scottsbluff and Morrill; and Ault, Colo.-based Highland.
The lawsuit said that in October 2006 Hergert signed three notes totaling $3.6 million and used as collateral 14 buildings at the Morrill milling plant, plant equipment, vehicles, semitrailers and office equipment.
The companies have defaulted on the loans and didn’t comply with a demand from the bank to either pay or turn over the collateral.
Hergert was elected in November 2004 to represent western Nebraska on the university’s Board of Regents.
He was impeached by the Legislature and convicted in 2006 of manipulating campaign finance laws and lying to cover it up. He was suspended from office after the Legislature’s impeachment vote.
He subsequently was found guilty by the state Supreme Court on two of 10 counts: false reporting and obstructing government operations. That led to his permanent removal from the board.
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