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.