Fmr. ConServe Exec. Gets Two Years for $8M Fraud

Kenneth Hasse admitted to defrauding investors out of $8 million to finance his company, ConServe Corporation.

Kenneth Hasse, who was president and chairman at now bankruptConServe Corporation, was sentenced on Wednesday to two years in prison for his alleged role in an $8 million scheme to defraud investors, Minnesota's U.S. attorney's office announced.

Hasse, a resident of Chaska, was charged in December and pleaded guilty in January to one count of conspiracy to commit wire fraud and one count of filing false income tax returns. He is the second ConServe executive who has pleaded guilty for defrauding the company's investors. David McCaffrey, a businessman from Wayzata who served as CEO of ConServe, was sentenced in December to two-and-a-half years in prison for his role in the fraud scheme.

ConServe was based in Minnetonka and provided electricity sub-metering services to apartment complexes. The company filed for Chapter 7 bankruptcy in June 2008.

In his plea agreement, Hasse admitted that between October 2004 and February 2007, he conspired with McCaffrey and others to defraud ConServe's investors-including Wayzata-based Carlton Financial Corporation.

Hasse admittedly indicated to investors that sub-metering equipment installation projects were in place or going to be put in place, when, in fact, they weren't. False invoices were allegedly created that reflected expenses connected to installations that were never done. ConServe then acquired financing from its investors based on the phony invoices, Hasse said in his plea agreement.

In addition, Hasse admitted to filing a false 2004 tax return, which resulted in a tax loss of about $124,907.