New details emerge in ValleyNet embezzlement case

John Van Vught in 2017. (Courtesy photograph)

John Van Vught in 2017. (Courtesy photograph)

By ALAN J. KEAYS

VTDigger

Published: 06-15-2023 5:50 PM

BURLINGTON — A Northfield man has pleaded not guilty to three felony charges alleging he embezzled more than $500,000 from a nonprofit organization that was working to bring broadband to central Vermont.

Recent documents filed by prosecutors also reveal that John Van Vught, 72, spent some of his nearly year on the run working as an accountant, the same position he held in Vermont while allegedly carrying out the embezzlement.

Van Vught entered his not guilty pleas Wednesday in U.S. District Court in Burlington to three federal wire fraud charges. Magistrate Judge Kevin Doyle granted a prosecutor’s request to hold Van Vught in custody while the case against him continues. 

Van Vught was arrested in Brunswick, Georgia, in mid-May and was brought to Vermont for Wednesday’s arraignment. He appeared in court wearing handcuffs and a dark green prison uniform.

According to an indictment filed by federal prosecutors, from 2013 to about July 2022, Van Vught “willfully participated in a scheme and artifice to defraud ValleyNet, and to obtain approximately $560,000 from ValleyNet accounts by materially and false and fraudulent pretenses, representations and promises.”

Van Vught, according to the indictment, hid the transfers by underreporting the income ValleyNet received in his accounting submissions. ValleyNet is a nonprofit organization that provides internet service operations to dozens of communities through contracts with ECFiber, a Vermont Communications Union District, and LymeFiber in New Hampshire.

During the period in question, according to a November 2022 report in the Valley News, Van Vught worked as a contract accountant for the company. He was reported missing by his family in July 2022 and hadn’t been seen since. 

The indictment alleged that Van Vught had used $181,419 of embezzled funds to purchase property in Georgia in 2018, and $313,992 to purchase property in Cocoa, Florida, on May 10, 2022.

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A recent motion filed by prosecutors seeking to hold Van Vught in custody stated that in early July 2022, ValleyNet leadership confronted Van Vught about the pattern of bank transfers related to the embezzlement. Thereafter, the filing stated, on July 6, 2022, Van Vught told his wife that he was going to the bank, and then never returned home.

During an interview after his arrest, the filing stated, Van Vught admitted to having embezzled funds from ValleyNet as outlined in the indictment. 

“Van Vught admitted that after the confrontation by ValleyNet leadership, he returned to his house, obtained over $20,000 of cash from his residence, and fled the state,” according to the filing.