Herald JournalHerald Journal, March 31, 2003

Howard Lake man sentenced to prison for embezzlement

By Lynda Jensen

A Howard Lake man was recently sentenced to nearly five years in prison for embezzling more than $220,000 from his former employer, according to Hennepin County Attorney Amy Klobuchar.

John Kenneth Eggert, 36, of Howard Lake, pleaded guilty to seven felony counts of theft by swindle in January. He is currently at the St. Cloud Correctional Facility.

Eggert was sentenced to 57 months in prison, and was ordered to make restitution for his thefts to Maxxon Corporation, based out of Hamel.

"This is a financial crime that was committed by someone who served in a position of trust with this company," Klobuchar said.

"Eggert abused his position of trust not only to commit these crimes, but also to conceal them for a long period of time in the course of normal business activities. We're seeing more of these crimes as many companies take a closer look at their books," Klobuchar said.

Klobuchar said the criminal case was investigated by the Hennepin County Sheriff's Office and the Medina Police.

According to the county attorney's criminal complaint:

Eggert was the corporate controller for Maxxon Corporation, a manufacturer of floor systems based in Hamel.

In that role, Eggert had sole control over the issuance of checks. He also had responsibility for receipt of cancelled checks and for balancing the accounts.

In March 2002, the president of Maxxon Corporation was notified that a payment from a company account had not been received. An investigation revealed that a check had been issued but the adjoining check stub was missing. Five additional check stubs were also missing, according to the complaint.

At about the same time, a Maxxon employee reported that Eggert was sending company checks as payments for his personal credit card.

A review of Maxxon financial records revealed that, dating back to 1999, checks totaling more than $132,000 had been sent to MNBA America, a credit card company.

However, these payments were described on Maxxon's internal accounting system as having been made to vendors who were no longer active with Maxxon.

When interviewed by police, Eggert admitted that he had been using Maxxon company checks to pay his personal credit card account for several years.

Eggert said he coded the checks to other vendors to avoid suspicion, according to the complaint.

When the canceled checks were returned to Maxxon, Eggert would take them home along with the accompanying disbursement forms and check stubs. Eggert explained that his lifestyle just got away from him.

The investigation also revealed that, in 1997 and 1998, Eggert embezzled more than $77,000 from Maxxon petty cash funds by claiming payments for company bulk mailings that never actually occurred.

There were payments for a total of 116 bulk mailings that are not accounted for in the records of the post office or the bulk mail business used by Maxxon.

A further review of Maxxon accounts and expenditures showed that Eggert diverted at least $11,000 in bank withdrawals intended for Maxxon's petty cash account.

He would withdraw cash from Maxxon's bank account, ostensibly to be placed in the petty cash account, but would then create false payment records on Maxxon's internal accounting system, according to the Hennepin County Attorney's Office.

In an interview with police, Eggert admitted that he took thousands of dollars from the Maxxon account by indicating that the funds were destined for petty cash while actually keeping the money for himself.


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