SALT LAKE CITY – Former Salt Lake City Councilman Eric Jergensen was sentenced to nearly five years in prison by a federal judge Friday for conspiring to defraud $2.5 million from a New York Company.
Jergensen, who served on the Salt Lake City Council from 2002 through 2009, was ordered by U.S. District Judge Brenda K. Sannes to pay $2.5 million in restitution to victims. After his 59-month prison sentence, he was also sentenced to three years of supervised release.
Jergensen, 58, was taken into custody after the sentencing in Syracuse, New York.
"Jergensen stole $2.5 million from investors trying to bring an innovative business and jobs to Plattsburgh, and then tried to cover up his theft with years of lies," U.S. Attorney Grant C. Jaquith said in a prepared statement Friday. "Today’s sentence holds Jergensen accountable for his greed and treachery.”
Jergensen and his Chicago business partner Debashis Ghosh, 53, were convicted in October of wire fraud conspiracy to defraud $2.5 million from the company Laurentian Aerospace Corp. following a seven-day trial in federal court.
Jergensen and Ghosh were co-CEOs in Chicago-based firm Verdant Capital Group. Laurentian had retained the firm to build an airplane maintenance, repair and overhaul facility in Plattsburgh, New York.
Laurentian wired $2.5 million to Verdant in December 2010 as seed money for the project. Despite an agreement to keep the money in a Wells Fargo account, Jergensen and Ghosh started transferring funds out of the account until it was empty, according to federal prosecutors.
The partners used the money to pay Verdant’s employees and contractors and others, including payments to a now-defunct wind turbine company in which Ghosh was a minority owner and Jergensen’s company Contour Composites Inc. in Utah, authorities said.
The victims include a retired 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.2 comments on this story
After spending the money, and as part of their conspiracy, prosecutors said, Jergensen and Ghosh then spent several years falsely assuring Laurentian and its investors that their money was safe and secure. Jergensen went 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, prosecutors said.
To date, Laurentian has been unable to build the airplane facility, prosecutors said.
“Jergensen and Ghosh abused their investors’ trust, as well as their money," said Vadim D. Thomas, FBI special agent in charge, in a prepared statement. "The FBI is dedicated to investigating these crimes because of their lasting impact on the lives of the victims and our community as a whole.”
Ghosh is scheduled to be sentenced April 2 in Syracuse.