GREENVILLE, Mich. (WOOD) — They came with promises of jobs for Greenville.
They left the West Michigan community with a broken promise and over $300,000 in the red.
Zero 1 was supposed to be the latest in Greenville’s efforts to replace the thousands of jobs lost over the years to plant closings.
The brainchild of two Ada men, Gardner Klaasen and David Valdesirri, Zero 1 is a folding, office-style chair designed for easy storage.
But the men needed money to buy the equipment to build the chair.
That’s where Greenville got involved.
The state, through the Michigan Economic Development Corporation, offers up loans to communities who want to help start-ups.
If the company creates the jobs, the loans are forgiven.
If they don’t, the equipment they purchase can be sold to repay the loan.
Either way, the City of Greenville had to back the funds.
But four year later, no chairs are being built at a rented space in a Grenville plant, and there are no jobs.
And Greenville taxpayers are left holding the bag.
“Ultimately, the city of Greenville had to repay the State of Michigan $310,000.” Greenville Department of Public Safety Chief Mark Reiss said.
In the beginning, the pitch from Klaasen and Vadiserri was positive. The men promised to create 100 jobs.
There were stipulations to how the $310,000 — the first installment of a loan worth over $900,000 — could be used.
“Specifically for the purchasing of machinery and equipment that would be used in the manufacturing of office chairs,” Reiss said. “Invoices were provided for machinery and equipment that was supposed to be purchase with this money.”
That was in 2010.
But, as investigators would eventually learn, none of the money was spent as it was supposed to be spent.
“The information that we received, even though due diligence was done, proved to be false,” Reiss said.
So where was the money going?
The answers could be found in expenses listed on ZERO 1’s bank statement.
“Mr. Klaasen paid himself $93,000, Mr. Valdeserri paid himself $35,000. They charged approximately $55,000 on debit cards to that account,” Reiss said, reading off the account ledger.
“Morton Steakhouse in Chicago for $650 for dinner. High-end seafood restaurant in Las Vegas…. it would appear that in one instance there was $600 and some used at a gentleman’s club in Las Vegas, however, I haven’t confirmed who was there, who used it,” Reiss said.
Klaasen and Valdiserri are facing up to 20 years in prison if convicted.
But the question remains: will Greenville taxpayers ever get any justice?
“Restitution may or may not be part of the criminal process. The city may or may not pursue civil remedies as well,” Reiss said.
Klaasen and Valdiserri are due back in court later in June for a hearing that will determine if there’s enough evidence to send the case to trial.