by Mike Donoghue, Vermont News First
A Northfield man, who officials say embezzled about $560,000 from an Upper Connecticut Valley non-profit, has pleaded not guilty in U.S. District Court in Burlington 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. at the time of the indictment, records show. He worked under a contract and served as the bookkeeper for ValleyNet.
The indictment noted ValleyNet was the “design/build/operate” partner for the East Central Vermont Telecommunications District, which is also known as ECFiber, which services more than 30 Vermont towns. The wide-ranging ECFiber district covers Newbury and Topsham and goes south along the Connecticut River to Hartford and into Windsor and West Windsor. It heads over to the Woodstock/Barnard/Pomfret area and west to Hancock and Granville and includes Randolph, Chelsea, Tunbridge and other Orange County towns.
ECFiber transferred its operations from ValleyNet to GWI Vermont, a Biddeford, Maine company, in January of this year.
Van Vught, who is the only person charged in the indictment, was arrested in Brunswick, Georgia on May 12. He had fled Vermont when the embezzlement was uncovered about a year ago.
After his arrest, Van Vught admitted to investigators the embezzlement, which happened between 2013 and July 2022, according to court papers.
ValleyNet management first confronted him in July 2022 about a pattern of bank transfers related to the embezzlement, officials said. On July 6, 2022 Van Vught told his wife he was headed to the bank and never returned home, the U.S. Attorney’s Office said. It turned out he took more than $20,000 from his residence and fled the state, officials said.
Five days later his wife received a package from her husband postmarked in Las Vegas, N.M. and it provided her power of attorney. The package was the only known contact his wife had with Van Vught until his arrest, the prosecution said.
He had planned to live in New Mexico, but gravitated back to Georgia, where he had once owned a vacation home, records show. He used cash to stay at an extended-stay hotel and began doing contract work as an accountant, court records note. Van Vught said he had planned to stay in the Brunswick area.
F.X. Flinn of Hartford, the ECFiber governing board chair, told the Vermont Standard, that the loss has not hurt the company.
“In a nutshell, the embezzlement had no material effect on our finances or operations as it took place over a 10-year period,” he said in an email.
“If and when we recover the $500K+, that will certainly help reduce any future borrowing we need to do, or help fund an investment in our business that we would otherwise put off into the future,” Flinn wrote.
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.
Read more about this in the June 22 edition of the Vermont Standard.