‘Stole solely out of greed’: ValleyNet embezzler gets 27 months in prison

John Van Vught in 2017. (Courtesy photograph)

John Van Vught in 2017. (Courtesy photograph)

By ALAN J. KEAYS

VtDigger

Published: 06-28-2024 2:55 PM

BURLINGTON — A Northfield, Vt., man will serve a little more than two years in prison for embezzling $558,000 over nearly a decade from a nonprofit organization working to extend broadband to the Upper Valley.

Judge Christina Reiss handed down a 27-month sentence to 73-year-old John Van Vught during a hearing Thursday in U.S. District Court in Burlington. He was also ordered to pay full restitution.

Van Vught had pleaded guilty to a wire fraud charge in connection with the embezzlement in February.

“This is the kind of crime employers really get outraged about,” Reiss told Van Vught. “This is someone they knew and trusted.”

From 2013 to about July 2022, Van Vught “willfully participated in a scheme and artifice to defraud” ValleyNet, according to charging documents.

Van Vught worked as a contract accountant for the company. He was reported missing by his family in July 2022 after the embezzlement was discovered and remained on the run until he was taken into custody in 2023 in Georgia, where he was working as an accountant, according to court filings.

ValleyNet is a nonprofit organization that provides internet service operations to many Upper Valley communities through contracts with the Vermont communications union district ECFiber and New Hampshire’s LymeFiber.

“Van Vught abused a position of trust at a nonprofit to swindle the entity of over a half million dollars,” Assistant U.S. Attorney Jonathan Ophardt, the prosecutor, wrote in a sentencing memo filed ahead of Thursday’s hearing.

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The prosecutor termed Van Vught’s action a “long-running, calculated fraudulent scheme” to steal money for his own personal benefit.

“Most troubling is that Van Vught’s financial disclosures make clear that this fraudulent embezzlement scheme was not motivated by financial desperation,” Ophardt wrote. “Van Vught instead stole solely out of greed.”

In court Thursday, Ophardt told the judge that the actual loss to ValleyNet far exceeded the $558,000 calculated for restitution since that money could have been used by the company to grow the business. He estimated the actual loss amounted to millions of dollars.

Michael Desautels, a federal public defender representing Van Vught, asked a judge to impose a prison sentence of less than 27 months for his client

“To this day, Mr. Van Vught has no clear explanation for why he went down this path of deceit and embezzlement. But he has made no excuses for his behavior,” Desautels wrote in his sentencing document.

As for his client’s reason for leaving Vermont for several months, Desautels wrote, “He simply knew that the other shoe was about to drop and had difficulty coming to grips with it all.”

In court Thursday, Desautels said his client will be selling assets, including property, to help pay the restitution.

The federal charging documents indicated that Van Vught had used more than $181,000 of the embezzled funds to purchase property in Georgia in 2018, and nearly $314,000 to purchase property in Florida in May 2022.

The defense attorney said Van Vught, after his release from prison, will need to rebuild his life. Desautels told the judge his client is currently “estranged” from his family and has no contact with them.

Van Vught, who appeared in court Thursday wearing dark green prison clothing, spoke briefly. He did not apologize for his actions, but instead took issue with a victim impact statement that said the economic loss to the company measured well more than the actual $558,000 embezzled.

In sentencing Van Vught, Reiss said she was taking into account a prior embezzlement case involving roughly $50,000 he had reportedly taken from a previous employer that had since been expunged from his record.

Desautels had objected to the judge considering the case since the only record that existed for it was a newspaper article and no court documents could be located.

“This is relevant,” the judge said of the expunged case. “This explains that this is not a one-off.”

Reiss also told Van Vught she was not going to give a sentence less than the 27 months called for by the prosecutor. She said no reason had been given for why Van Vught committed the embezzlement from ValleyNet other than greed.

“This was not to pay health care bills,” the judge said, adding, “You bought vacation properties and toys.”