Ex-banker to plead guilty in fraud case against WEDC recipient
A Wisconsin businessman has struck a deal with federal prosecutors to plead guilty to fraudulently obtaining bank loans for a man who was also involved in defrauding the Wisconsin Economic Development Corporation.
The Wisconsin State Journal reported that Paul Piikkila’s deal calls for him to acknowledge committing conspiracy to defraud his employer, Horicon Bank, of more than $700,000. The deal also requires Piikkila, of Appleton, to testify in the case, which involves De Pere businessman Ron Van Den Heuvel.
Van Den Heuvel has pleaded not guilty to a 13-count indictment. But according to the plea agreement, Piikkila will acknowledge his role in fraudulently securing more than $1 million in loans from Horicon Bank for Van Den Heuvel and his wife in 2008 and 2009.
Green Bay Press-Gazette reported that Van Den Heuvel borrowed money from the bank and investors ostensibly to pay for equipment and operations of seven businesses that he claimed to operate. But the money he raised actually supported a lavish lifestyle that included a luxurious house, a Florida residence, expensive cars, a luxury box at Lambeau Field, a private plane, and a live-in nanny, who told authorities that she was never paid. She also said Kelly Van Den Heuvel ran up large debts on her credit cards.
Van Den Heuvel faces up to 30 years in prison and up to $1 million in fines on each count. Piikkila faces up to five years in prison and a fine of $250,000. But, in exchange for his guilty plea, prosecutors have agreed not to charge him with additional offenses.
Piikkila will be sentenced July 29.
The fraud case is unrelated to another, higher-profile scandal in which Van Den Heuvel received $1.2 million from Gov. Scott Walker’s “job-creation” agency, the Wisconsin Economic Development Corporation. Critics have branded WEDC as a corporate welfare agency for giving away millions to political donors without holding them accountable for creating jobs in return for the money.
In some cases, WEDC recipients took money and shipped jobs to other states or overseas. In other cases, the loans weren’t properly recorded, tracked or repaid — with impunity.
Van Den Heuvel, a longtime Republican donor, seems in some ways typical of WEDC awardees. He received the loans just months after the agency’s creation in 2011 based on his connections. He never underwent a background check. If he had, WEDC, which was headed by Walker at the time, would have learned that Van Den Heuvel owed millions in legal judgments to banks, business partners, state tax officials and even a jeweler.
Despite Van Den Heuvel’s failure to produce jobs or repay his initial loan, WEDC officials considered giving him more money as recently as February 2015.
Van Den Heuvel’s proposed business to create jobs was called Green Box NA. He claimed the company would convert dirty napkins and plastic eating utensils into synthetic fuel and paper products, but it apparently never had either a facility or the technology to perform such functions.
Van Den Heuvel faces numerous lawsuits from investors who loaned the business money, thinking that it was legitimate.
Green Box has declared bankruptcy. The state apparently is not pursuing charges or repayment from Van Den Heuvel.