Hergert enters not guilty pleas to bank fraud

Regional News

LINCOLN, Neb. (AP) -- Former University of Nebraska Regent David Hergert walked into a federal courtroom on Tuesday, took off his black cowboy hat and pleaded not guilty to bank-fraud charges that could land him in prison for years.

The pleadings to 18 counts of bank fraud made in U.S. District Court in Lincoln make it likely the 69-year-old Mitchell resident will face his second trial in four years - this time with arguably higher stakes.

Each count of bank fraud carries a maximum sentence of 30 years in prison and a $1 million fine.

In 2006, Hergert was suspended from the board of regents after being impeached by the Legislature based on allegations he broke campaign finance laws during his 2004 campaign. He was permanently removed from office later in 2006 when he was convicted by the state Supreme Court of manipulating campaign-finance laws, then lying to cover it up.

The fraud charges mark the latest episode in a string of legal and financial woes following his 2006 ouster from office.

As he left the courtroom with a U.S. Marshal on Tuesday, Hergert didn't respond to a questions about the possibility of being sent to prison. His attorney, Chris Ferdico, also declined comment.

Hergert is accused of inflating the assets of Hergert Milling Inc. in order to maintain a $3 million revolving loan through First National Bank of Omaha.

Court documents say the activity occurred between January 2000 and December 2006.

According to the indictment, Hergert would direct employees to "fraudulently and materially manipulate" the value of the feed mill's assets when preparing required monthly asset statements for the bank.

That led the bank to believe Hergert Milling had assets above the value of the loan when, it "in fact, did not have sufficient collateral to support the outstanding loan balance."

The court released Hergert on Tuesday, but will limit his travel and took away his passport.

U.S. Magistrate David Piester told Hergert he could not leave Nebraska or Goshen County, Wyo., which abuts Nebraska's western border near Scottsbluff, without first getting the court's permission.

Piester also told Hergert he was prohibited from having any contact with potential victims and witnesses of his alleged crime.

A trial date wasn't set, but it won't be soon.

Piester tentatively set a mid-September date for motions to be filed in the case. Prosecutor Steven Russell told Piester the case was complex and would require about five months of preparation.

Illustrating the complexity, Russell said there are 25 large bank boxes of documents to sort through, and 10 to 15 smaller boxes.