Hermes Vineyards owner indicted

Federal government alleges David Kraus, 52, sold about $2 million in assets used as collateral for federal farm loans
Andy Ouriel
Aug 6, 2014

ouriel@sanduskyregister.com

Federal authorities levied a five-count criminal indictment against the owner of a local winery, accused of bilking the government for loans made to his business.

Hermes Vineyards owner David J. Kraus, 52, allegedly sold about $2 million in assets representing collateral for federal farm loans equaling roughly $595,000.

“This defendant is charged with defrauding a program designed to help struggling or family farmers by, among other things, unlawfully pocketing millions of dollars from the sale of wine and grapes,” according to a statement from Steven Dettelbach, a U.S. attorney for the northern district of Ohio. “Those who seek federal assistance must follow the rules, whether they are food stamp recipients or want to own a winery. These programs are for the public good, not personal enrichment.”

The indictments come almost two years after federal authorities, including those sporting bulletproof vests, raided this vineyard and seized some documents. The winery’s located on Ohio 4 near Miller Road.

Among the charges Kraus, a New York-based psychiatrist, faces and explanations from the federal government:

• Count No. 1: Kraus sold $2 million in grapes and wine, “which had been pledged as collateral for loans,” totaling about $595,000. He also “failed to remit the proceeds from such sales to the USDA Farm Service Agency.”

• Count Nos. 2, 3 and 4: Kraus made various and substantial false statements and representations to federal officials related to these loans.

• Count No. 5: Kraus made false statements on a loan applications submitted to Citizens Bank on or about July 22, 2010, “for purposes of influencing the bank’s action.”

It's not immediately clear exactly what penalties Kraus could face if convicted, either on certain or on all counts.

A Hermes Vineyards employee, answering the phone late Wednesday afternoon after the Register place a call, said she’s unsure of the winery’s future. The winery stayed open shortly after the indictments came down.

An indictment is a formal charge and does not denote guilt or innocence.

Comments

Wjones44

Wow! Not good!

deertracker

I guess some fight and others rob..........millions!!!!!!!! Call the NAAWP!

KnuckleDragger

That would be about as effective (because it doesn't exist) as the NAACP, who prefers to blame everybody else but themselves for problems in the black community. Besides, what does this have to do with race? A criminal is a criminal. White or black, if you do the crime, you do the time. This idiot stole the taxpayers money and he should be punished for it just as anyone else should.

Dr. Information

deer never passes up an opportunity to bring up race.

JMOP

Overkill on federals being armed and with bulletproof vests. When this story first broke, I thought the winery was being run by some Mob members.

yea right

we are all a threat to National Security..since 9/11..and homeland security has taken over..after all you jay walk and you will have 20 cop cars and swat there to meet you on the other side of the road and be taken to that island south of Florida..

sugar

Maybe the GD government should stay out of the loan business, too easy to rip these bozos off, and it's NOT the Feds money, they have no money, it's taxpayer money. Dumb clucks.

Wjones44

So is the winery open or not? I'd like to go a few more times before it shuts down.

Another Opinion

Why would you support someone who stole from the taxpayers?

Wjones44

Because I'm an alcoholic

Tsu Dho Nimh

lol

k9unit

:) ^

Brick Hamland

Plus everyone steals from tax payers... and if you were that concerned about tax payers money you would go more often now because all the proceeds will go back to the tax payers (or at least the government) since operations will be watched by a receiver or government oversight... "becasue i am an alcoholic" was one of the best posts i have ever seen on here... well done

Wjones44

Thank you Mr. Hamland. I speak the truth good sir.

Darwin's choice

Friend of joe yost? He'll get off with a slap on the wrist....

WeThePeople1965

Not with the federal government. The feds don't play.

Babo

So what local pol covets the property? Odd that when Baxter defrauded the government to pay off Citizens Bank, no feds got involved. And no feds got involved to go after the contractors who defrauded the government in the housing grant fiasco. No feds got involved with the massive thefts at OI's Cold Creek. The feds never went after those conduits in the weapons sales from Perkins PD. And of course we won't see the feds stand up for the people of Sandusky with the massive thefts by Joe Yost.

The fact that this is a wealthy out of town person who owns valuable land in vacationland has nothing to do with the fact that he got singled out for prosecution by the feds while all the local yokels walk right?

Ralph J.

LIKE. Dave's dad is a staunch Republican. Democrats get a free pass.

Julie R.

Wow Babo, you sure hit the nail on the head with that comment. All the fraud that's been going on with property in Erie County for a looooong time (even the title companies know all about it ---- one said it's unreal), yet this guy gets singled out for prosecution.

I also wouldn't trust that Citizens Bank for all the tea in China. I wouldn't trust KeyBank (main headquarters corrupt Cleveland, Ohio), either.

WhatTheHeck

Julie R. please stop the fact less babble. You are an idiot. Seek mental help.

Julie R.

I'll bet you wish it was factless babble.

There you go again

What's fact less about her comment? And even if it is fact less, these comment sections provide readers methods to voice an opinion. You know....it's called First Amendment. Gees....

deertracker

Julie is right. The way property taxes are assessed in EC is downright corrupt. Give her a hard time all you want but she is not lying!

Julie R.

@There you go again: Sorry, but I'm not voicing an opinion. I've never said anything yet that isn't a fact and a matter of public record. If you think what I say is just an opinion, why not contact Maximal Properties LLC and ask why no title company around would ever give out title insurance on the property he obtained at a court-ordered scam sheriff sale. (btw, a scam is a fraudulent or deceptive act)

k9unit

Go back under your rock, susie^

sugar

More dirty crony cap.

Ralph J.

And now the rest of the story.
http://www.sanduskyregister.com/...

ram03

Who takes grapes as collateral? Bet the real banks laughed him to the door.

Momma-of-2

Citizens Bank does....it's a joke!

Babo

Grapes are a crop/commodity just like corn or soybeans and many banks are familiar with agricultural lending

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