Livestock Broker Offers Guilty Plea in $2.9 Billion Fraud Case
MINNEAPOLIS (AP) _ A Minnesota livestock broker accused of writing nearly $2.9 billion in bad checks to pay for cattle that existed only on paper agreed Wednesday to plead guilty to one count of bank fraud.
Firstar Corp., based in Milwaukee, said it lost $22 million in the scheme. John Morken, who owned the Spring Grove Livestock Exchange, said he knew he was using the bank’s money and was unauthorized to do so.
Morken was accused of transferring funds between accounts to make it appear that the Spring Grove Livestock Exchange was doing more business than it actually was.
In a check kite, a bank customer uses the float _ the time between writing a check and having it clear _ to falsely inflate the checking account balance.
U.S. District Judge James Rosenbaum conditionally accepted the guilty plea and ordered a pre-sentence investigation. Sentencing is expected in about 90 days.
Morken would serve just under six years in prison under the agreement. He remains free on bond until sentencing.
Under the agreement, charges against Morken’s daughter, Rachel Enders, and another of his employees, Terry Ziegelbauer, would be dismissed at the time Morken is sentenced.
Morken and his attorneys declined to comment on the plea agreement.
A fourth defendant, livestock exchange employee Steven Weiland, agreed to get prosecutors’ permission before taking an accounting or banking job for two years and cooperate in any further investigations of the Morken case.
After the two years, the charges would be dismissed.