Federal prosecutors say they will seek substantial prison terms for two local businessmen found guilty Thursday of swindling investors out of millions of dollars through the sale of Iraqi currency and two nonexistent hedge funds.
Bradford Huebner, 66, of Ottawa Hills and Charles Emmenecker, 67, of Sylvania each were convicted by a jury in U.S. District Court of conspiracy to commit wire fraud and wire fraud in connection with the $24 million scheme.
A third co-defendant, Michael Teadt, 67, of Maumee was acquitted of those counts and of three counts of structuring transactions to evade reporting requirements and one count of making a false statement to an Internal Revenue Service agent. Teadt was found guilty of one count of mail fraud for a matter unrelated to the investment scheme.
Huebner, the founder of BH Group, which sold some $23.8 million of the currency known as dinar between 2010 and 2011, also was convicted of 30 counts of structuring, nine counts of money laundering, and one count of mail fraud. Prosecutors alleged the group made false claims about the potential value of the dinar and portrayed a former member of the group, Rudolph Coenen, as a decorated Marine wounded in Iraq, among other falsehoods.
Gene Crawford, an assistant U.S. attorney and lead prosecutor on the case, said, “The IRS put together a great case. They worked very hard on it.” He also added, “We obviously thought we had a provable case, and we certainly won most of what we were looking for. We’re gratified with what the jury did, and we certainly respect their decision.”
He said the men could face a maximum of 20 years. “We will certainly be asking for lengthy prison sentences,” Mr. Crawford said.
Also facing a lengthy prison sentence is Coenen, 47, of Jacksonville, who was not on trial but who pleaded guilty last year to conspiracy to commit wire fraud, wire fraud, and five counts of money laundering.
It was Coenen who was the bad guy in the case, defense attorney Rick Kerger told the jury at the opening of the trial. Mr. Kerger asserted his client, Huebner, was taken in by Coenen’s lies and misrepresentations and unknowingly repeated those to his customers.
After hearing two weeks of testimony in the case, the jury of six men and six women deliberated more than 17 hours over four days, deadlocking at one point on Wednesday before being sent back to the jury room to try to reach a unanimous decision.
“I’m obviously disappointed at the verdict, but certainly respect the effort the jurors put into reaching it,” Mr. Kerger said.
All three co-defendants took the witness stand during the trial. Huebner claimed he was only doing what he’d done all his life — running a legitimate business. Emmenecker and Teadt said they were not part of BH Group and never received compensation for anything they did to help Huebner, whom they considered a friend.
Teadt said Huebner allowed him to use space at his downtown office. He and Huebner were convicted of mail fraud for filing an application for federal training funds for unemployed workers through Wood County Job and Family Services. Huebner, who was still employed with S.S. White Technologies in New Jersey at the time, was to have been trained for an energy business venture of Huebner’s.
In the end, lying on the form was the only crime the jury found Teadt guilty of.
“I think that the jury thankfully looked at each of the defendants individually,” his attorney, Charles Boss, said. “Mr. Teadt, is really, as I said in opening statements, a victim of circumstance. He happened to be there at the same time as these other activities were happening. He really wasn’t involved in them.”
Emmenecker told the jury he moderated weekly conference calls for BH Group in which Huebner, Coenen, and other dinar “experts” promoted investing in the currency under the premise that one day soon the Iraqi government would revalue its currency, making any investor wealthy overnight.
Emmenecker contended he took no other part in the business, was not paid, but only had expertise in conducting conference calls from his business as a XANGO distributor, selling juice and other healthy living products.
His attorney, Reg Jackson, said he was “disappointed, however, we accept the jury’s verdict and wait for the next proceedings to occur.”
Judge Jack Zouhary expects to sentence the men in October, although a firm date was not set. He allowed each to remain free on bond until sentencing.
Coenen pleaded guilty in April, 2013, but has not been sentenced because as part of his plea agreement, he testified at his co-defendants’ trial.