Former IT manager held liable for profits

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Ted Sullivan
Tuesday, December 21, 2010
— Closing arguments are scheduled for today in the civil trial against the former Janesville School District information technology manager convicted of organizing a scheme to profit from district purchases.

Brandon Keirns of Milwaukee and co-defendant Jason Manthei of Waukesha have been found liable for civil damages for racketeering. Keirns and Manthei were on trial Monday in Rock County Court to determine whether they should pay the district money for damages.

Judge James Welker heard testimony from several witnesses until attorneys on both sides rested at 6 p.m. He asked the attorneys to make closing arguments at 10 a.m. today.

According to Welker's order finding Keirns and Manthei liable for racketeering:

The school district hired Keirns as its information technology manager in January 2008. His responsibilities included making recommendations regarding what equipment the district should buy.

Keirns also was the sole officer or owner of Mithrax Networking, Error Help Group, Amog Consulting and De Rekening Group.

Keirns advised the district in January 2008 to buy electronic software through De Rekening. He didn't disclose his interest in the company.

Keirns also had Manthei act as a consultant for Mithrax. Keirns and Manthei agreed to sell computer hardware to the school district through a company Manthei owned. Keirns and Manthei agreed to split the profits.

Keirns advised the district to buy computer hardware from Manthei's business from January 2008 to November 2008. The district bought $850,000 in hardware from Manthei, who paid Keirns for his share of the profits.

Meanwhile, Keirns asked Shannon Fermanian of Scottsdale, Ariz., to form a business for the purpose of selling computer software to the school district. The district bought software from Fermanian's business. Fermanian and Keirns agreed to share the profits.

Attorneys for Keirns and Manthei argued that no evidence exists to prove the district would have paid less for those products if they had been bought from another business. They argued the district was not damaged if it was not overcharged.

The judge, however, disagreed.

"It is clear that they were involved in a conspiracy to split profits from the sale of goods to the school district based upon Keirns' position with the district and without advising the school district of what they were doing," Welker wrote in his order.

"It may be impossible to know whether the district could have purchased those products for the same price or less somewhere else."

Keirns was charged in criminal court and pleaded no contest to one felony charge of being a public employee entering into a contract with private interests and five misdemeanor charges of theft.

State statutes prohibit public employees from arranging contracts for their employer that benefit themselves.

Keirns was sentenced to three years probation. He agreed to pay the school district $178,000 in restitution, including a down payment of $70,000. He was then ordered to pay about $3,000 a month for three years.

The felony charge could be dismissed if Keirns completes probation. He could face prison time if he violates probation.

Manthei and Fermanian were not charged in criminal court.

Attorneys for Keirns and Manthei argued that the $178,000 in restitution in the criminal case is enough for the district's civil damages.

The judge, however, decided the district wasn't limited to the restitution amount because it wasn't a party to the criminal case and didn't have a right to a trial, to call witnesses or to appeal.

Last updated: 3:46 pm Thursday, December 13, 2012

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