ConServe President Gets 24 Months For Defrauding Wayzata Company

A U.S. District Court judge on Wednesday sentenced the former president of Minnetonka-based ConServe Corp. to 24 months in prison for an $8 million scheme to defraud investors, including Wayzata’s .

Kenneth Hasse pleaded guilty Jan. 18 to one count of conspiracy to commit wire fraud and one count of filing false income tax returns in connection with the scheme, according to a release from the U.S. Attorney’s Office for the District of Minnesota.

The ConServe provided electricity submetering services to apartment complexes. It also enticed investors to finance the installation of the submetering equipment. Carlton Financial Corp. invested “millions in operating dollars” with ConServe, according to the release.

Hasse admitted that between October 2004 and February 2007, ConServe told investors installation projects were in place or were going to be put in place. In reality, that wasn’t the case. The company created false invoices for the fictional installations and submitted them to investors. It also created phony acceptance certificates to “certify” them.

Hasse also filed a false 2004 tax return that resulted in $124,907 in lost tax revenue.

ConServe filed for bankruptcy in June 2008.

ConServe CEO David Hugh McCaffrey also admitted participating in the scheme, pleading guilty April 30, 2010. On Dec. 9, a judge sentenced him to 30 months in prison.