Hasse Pleads Guilty in $8M ConServe Fraud Scheme

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 bankrupt ConServe Corporation, pleaded guilty Tuesday to one count of conspiracy to commit wire fraud and one count of tax evasion for defrauding investors out of $8 million to finance ConServe.

Hasse, who lives in Chaska, was charged in December and is the second man who has pleaded guilty for defrauding ConServe investors-David McCaffrey, a businessman from Wayzata, was sentenced in December to two-and-a-half years in prison for his role in the fraud scheme. McCaffrey served as CEO of ConServe.

In his plea agreement, Hasse admitted that between October 2004 and February 2007, he conspired with McCaffrey and others to defraud its investors, including Wayzata-based Carlton Financial Corporation, by making false representations.

Specifically, Hasse defrauded the investors by indicating 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 created that reflected expenses connected to installations that were never done, Hasse said in his plea agreement.

In addition, Hasse admitted to filing a false 2004 tax return, which had an estimated tax loss of about $124,907. A sentencing date has not yet been set.

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