by Mike Donoghue, VermontBiz Correspondent A Northfield man, who officials say embezzled about $560,000 from an Upper Connecticut Valley non-profit, pleaded not guilty in U.S. District Court in Burlington on Wednesday to three counts of wire fraud.
John Van Vught, 72, defrauded ValleyNet Inc., a non-profit that had a contract to operate fiber-to-home internet networks serving customers in east-central Vermont and Lyme, N.H., the indictment said. He worked under a contract and served as the bookkeeper for ValleyNet.
ValleyNet is the "design/build/operate" partner for the East Central Vermont Telecommunications District (ECFiber), which consists of more than 30 Vermont towns, the indictment said. The wide-ranging district covers Newbury and Topsham and goes south along the Connecticut River to Hartford and into Windsor. It heads over to the Woodstock/Barnard area and west to Hancock and Granville and includes Randolph, Chelsea and other Orange County towns.
The indictment seeks to have Van Vught forfeit properties bought in Jekyll Island, Georgia in 2018 and Cocoa, Florida in 2022 with ValleyNet funds diverted to multiple financial accounts he shared with his wife at the Northfield Savings Bank, court records show.
Van Vught, who is the only person charged in the indictment, was arrested in May in Georgia. He had fled Vermont when the embezzlement was uncovered a year ago.
Van Vught applied to have a lawyer appointed at taxpayer expense, but Magistrate Judge Kevin Doyle said he needed to know more about his finances.
Van Vaught, who officials say was on the run for almost a year, said he was unsure about his worth.
"I have not been in contact with those numbers for 11 months," Van Vught told Doyle.
The arraignment was delayed until the bearded Van Vught, who has a hearing issue, could be outfitted with earphones. They initially didn't work, but Chief Federal Defender Michael Desautels got them working and the arraignment began.
Doyle gave Van Vught two weeks to file a new affidavit concerning his finances.
Doyle outlined the three felony charges to Van Vught and said the government is seeking the forfeiture of property, including two real estate purchases in Georgia and Florida.
Doyle said the felony charges center on three interstate wire communications that include a $181,419 transfer from a Vermont bank for the purchase of the property in Georgia on June 29, 2018 and a $313,992 transfer from a Vermont bank for the purchase of the property in Florida on May 10, 2022.
The third count is a June 22, 2022 email that reconciles ValleyNet accounts between Jan. 1, 2022 and May 31, 2022. It contained false entries that were provided to a newly hired Director Finance, the indictment said.
Van Vught said "not guilty" when Doyle asked for his pleas.
Desautels said Van Vught would not fight a detention motion filed by Assistant U.S. Attorney Matt Lasher claiming the defendant was a risk to flee.
Desautels said he would like 90 days to research the case and consider pre-trial motions. Doyle set a Sept. 12 deadline.
Lasher said the case involves bank and business records from Valley Bet and the Northfield Savings Bank, where there were five accounts going back to 2013. Lasher also mentioned there is a post arrest statement, a search warrant for a Gmail account, property records and a criminal history to research.
Northfield Police arrested Van Vught in another embezzlement case in 2002 after the local office for TDS Telecom reported $49,000 had been diverted from the company, according to a news story in the Times Argus.
Van Vught, who was the boys varsity basketball coach at Northfield High for three years, listed his employer during his 2002 arrest as the Marriott Hotels of Williston, the Times Argus said.
Van Vught provided ValleyNet with accounting services, including handling bank accounts, preparing payroll and paying vendor invoices, starting in 2010 and ended in early July 2022, the indictment said.
During that time period, Van Vught transferred $560,000 out of ValleyNet’s accounts into his personal bank account, the indictment said.
Van Vught hid the improper transfers by underreporting the income ValleyNet received according to his accounting submissions, records noted.
If convicted, Van Vught faces up to 20 years in prison for each wire fraud count.
