Former Salt Lake City councilman Eric Jergensen and a co-defendant were convicted Wednesday in New York of conspiring to defraud an aerospace company of $2.5 million.
A jury returned the guilty verdict after a seven-day trial in U.S. District Court in Syracuse. Sentencing is scheduled for Feb. 16.
Jergensen — whose legal name is Keith Eric Jergensen — and Debashis Ghosh, of Chicago, face a maximum punishment of 20 years in prison and a $250,000 fine.
Jergensen, 58, and Ghosh, 53, — who were co-chief executive officers of the Chicago-based Verdant Capital Group, LLC — were indicted in 2016 by a federal grand jury in Albany, N.Y.
According to the indictment, Laurentian Aerospace Corporation contracted with Verdant to raise funds for construction of an airplane maintenance facility in Plattsburgh, N.Y. As part of the deal, Laurentian deposited $2.5 million in seed money on Dec. 3, 2010, into an account with the understanding it would remain there for at least a year, the indictment says.
Five days later, Jergensen and Ghosh began transferring the money out of the account without Laurentian’s authorization, and by March 18, 2011, they had transferred all of the $2.5 million out of the account, the indictment alleges.
The two men were accused of using the money to pay for Verdant’s expenses, and of transferring the funds to other companies. Prosecutors allege the payments and transfers included $1.75 million to a now-defunct home energy service company; a $55,000 loan to an acquaintance; at least $40,000 sent to a Jergensen company called Contour Composites; and $14,500 to an Arizona man who was promising Jergensen and Ghosh access to union pension funds.
“Having spent the money, and as part of their conspiracy, Jergensen and Ghosh then spent several years falsely assuring Laurentian and its investors that their money was safe and secure, with Jergensen going so far as to forge a memorandum of understanding that purported to show that Laurentian’s money was in a secured bank account at Wells Fargo,” a news release issued Thursday by the U.S. attorney’s office for northern New York says. “The victim investors included a retired United States Air Force colonel, a former New York City Deputy Mayor, a retired law firm partner, and several retired executives from the financial and airline industries.”
Evidence presented at trial also showed that Jergensen and Ghosh misappropriated an additional $2.4 million in funds that other businesses had entrusted to them, the news release says.
Jergensen served on the Salt Lake City Council from 2001 through 2009, representing Capitol Hill and the Avenues. He also served as head of the city’s redevelopment agency.