Former West Des Moines businessman John Vratsinas has been accused of embezzlement, fraud and misleading court officials in his personal bankruptcy case.

In a filing on behalf of U.S. Trustee Daniel McDermott, Vratsinas is accused of concealing assets or the transfer of assets among his various companies and to his personal accounts, as well as lying under oath during bankruptcy hearings. Bankruptcy officials have struggled to determine Vratsinas’ true assets. According to one document, Vratsinas has not accounted for $2 million that was transferred to his personal bank accounts in the year before he filed the bankruptcy case in June 2013.

Court officials accuse Vratsinas, 45, of trying to mislead them about hidden assets. At least one issue involving fund transfers appears to have been resolved, but the filing by the U.S. trustee threatens the bankruptcy filing and could result in it being dismissed, meaning Vratsinas would be liable for his debts.

Vratsinas has rolled through a series of Greater Des Moines businesses, including a construction company and employee services providers that are now defunct. Vratsinas now lives in Chicago by way of Clear Lake and Minneapolis, but he was a prominent businessman, entrepreneur and investor during his years in Greater Des Moines. His civic involvement was noted when he made the Business Record’s Forty Under 40 class of 2004.

Now Vratsinas bills himself on his website, vratsinas.com, as an entrepreneur, investment adviser and venture capitalist. His LinkedIn profile says that he is managing a Chicago company called Transaction Analytics Inc.

The issue of missing money surfaced in October 2012, when the Internal Revenue Service notified some Greater Des Moines companies that their employee payroll taxes, which were supposed to have been paid under a contract with Vratsinas’ InFocus Partners employee services provider, in fact had not been paid. The companies were told that they might be responsible for paying those taxes again. Merit Resources Inc. took over InFocus Partners’ accounts in late 2012.

According to the bankruptcy court filing, Vratsinas borrowed $4.9 million from his father, Gus Vratsinas, whose former Arkansas-based construction company built Jordan Creek Town Center, to pay those payroll taxes.

About six months later, he filed for bankruptcy.

Two court filings last week in the U.S. Bankruptcy Court for the Northern District of Iowa in Mason City allude to the difficulty in determining his exact assets.
   
On March 10, the U.S. trustee - the court official who serves as a watchdog over bankruptcy cases - filed a complaint saying the $6.4 million in unsecured debts Vratsinas claimed should not be shielded from creditors because he has misled or lied to court officials.

Two days later, another court officer charged with the administrative details of the case filed a document saying that he had reached a compromise for the turnover of assets from a Vratsinas-managed company after determining it would be too costly and complicated to seek judicial relief.

The U.S. trustee’s filing said Vratsinas improperly used funds for personal expenses, including flights, international travel, hotels, dining, his Minnesota condominium rent and season tickets to the Minnesota Twins in 2013, according to the court document.

Vratsinas also misled bankruptcy court officials about an international flight that included a stop in Switzerland, where, according to the court document, he told officials he left the airport to smoke. However, banking statements showed hotel and dining charges in various locations in Switzerland between July 22 and July 24, 2013, one month after he filed the bankruptcy case. The document offers no additonal information about why Vratsinas was traveling. 

Vratsinas also initially concealed his involvement with a range of companies he was involved with as president, manager, investor or director. In his initial bankrupcy filing, Vratsinas said he had an interest in 18 limited liability companies. His attorney later submitted a document titled “Downstream Entities” that reported an interest in 43 limited liability companies and what were called “sub-child” companies. The U.S. trustee’s objection to the discharge of debts under the bankruptcy case focused on fund transfers of eight companies, 

Vratsinas feigned ignorance about the operations of at least one company he controlled.

When asked during a meeting of creditors in the current case about Heartland Equity Partners LLC, a pass-through entity he controlled, Vratsinas testified: “I have no idea. I have no role in that company.” The court filing points out that he was the manager of the company and controlled its bank accounts.

Meanwhile, the trustee assigned to collect assets and pay any bills of the Vratsinas bankruptcy estate has reached an agreement on a complaint he had filed seeking the turnover of Heartland Equity Partners’ assets to the estate.

David Sergeant said in a court filing March 12 that he has reached a compromise after Vratsinas submitted defenses concerning Heartland Equity Partners.

Vratsinas will settle all claims of the estate to the assets of Heartland Equity Partners in exchange for the transfer of $100,000 and the company’s stake in Heartland Agri Partners LLC, free and clear of any liens and security interests, including those of Vratsinas Capital Resources LLC, Gus Vratsinas, or any of his or his son’s related entities.

Heartland Agri Partners does business as Urbandale-based Insta-Pro International Ltd., a manufacturer of food and 
feed processors.

A web of vratsinas companies 

Transactions with these companies caught bankruptcy officials’ attention:

- Iowa Construction Logistics Inc., which Vratsinas controlled as sole officer, director and shareholder.
- ICL Staffing LLC, which was controlled by Vratsinas as its manager and as the 100 percent owner of Iowa Construction
- Logistics Inc., the controlling member of ICL Staffing LLC.
- ICL Staffing Inc., controlled by Vratsinas as its president and as the owner of Iowa Construction Logistics Inc., the controlling shareholder of ICL Staffing Inc.
- Arapaho Partners LLC, controlled by Vratsinas as the sole member and manager.
- Vratsinas Capital Resources LLC, controlled by Vratsinas as sole manager and majority member.
- Heartland Equity Partners LLC, controlled by Vratsinas as the manager.
- DDP Norwalk #1 LLC, controlled by Vratsinas as manager.
- MycoInnovations Inc., known as John Vratsinas Commercial Builders Inc., controlled by Vratsinas as the officer, director and majority shareholder.

@Vratsinas on Twitter

John Vratsinas’ Twitter account - @vratsinas - in the past few months suggests that he is enjoying live music, is watching a lot of TV and follows the Minnesota Wild hockey team. He’s posted 867 tweets since opening the account in 2009 and has 569 followers. He identifies himself as “Entrepreneur/ Investment Advisory/venture capitalist” and lists these coordinates as his location: 55.7517° N, 37.6178° E, which would place him in or near the Kremlin.

In addition to promoting his blog posts on his website www.vratsinas.com, photos and tweets posted suggest that he enjoyed an Aimee Mann concert at the First Avenue concert venue in Minneapolis in November 2012 and a show by the band Foreign Subjects in Chicago last month. 

Some of his recent tweets:

March 11: I’m an aviation nerd, I have been obsessing about Malaysia Airlines Flight MH370.   Did it get taken by ALIENS(UFO)? http://tinyurl.com/pa9av9u

March 5: (Former IRS official) Lois Lerner is an embarrassment to the United States   #cspanchat #irs #corruption

Feb. 26: HOW DIGITAL INNOVATION WILL DRIVE WEALTH AND KILL REAL JOB GROWTH: PART 2 http://www.vratsinas.com/innovation-will-kill-job-growth-part-2/ …   #GDP  #Jobs #unemployment #vratsinas

Feb. 4: Nice Win @mnwild