CyberNET's 'money man' admits money laundering

November 22, 2006
By John Tunison
The Grand Rapids Press
GRAND RAPIDS -- At CyberNET, David Roepke was the "money man," prosecutors said.

As the company controller, he moved funds from ill-gotten loans to make it appear the high-tech computer business was doing well financially.

"His job was simply to move the money, so it could be used to pay salaries and give profits to people," U.S. Attorney Tim VerHey said Tuesday. "They had to keep appearances up to the outside so, as an IT company, they looked successful."

Roepke pleaded guilty in federal court Tuesday to money laundering, making him the second former CyberNET official since Friday to admit wrongdoing and the third this year. Jonathan Mast, 37, a former vice president for sales, pleaded guilty last week to criminal conspiracy, and former CyberNET President James Horton pleaded guilty in June to bank fraud, money laundering and conspiracy.

CyberNET was the South Division Avenue company that defrauded banks and lenders of an estimated $90 million, fooling them into making loans for computer equipment that did not exist.

"This case is about money and (Roepke) was the money man," VerHey said. "He was not the person making the highest-level decisions, but it is still important that people like that pay the price for what they did."

Roepke explained to federal Magistrate Hugh Brenneman Jr. that CyberNET's owners told him to move money from an account at Silicon Valley Bank to an account at Huntington National Bank, which was providing a $17 million line of credit for general operating purposes.

Roepke, 62, refused to comment after leaving court and quickly walked to a vehicle with his attorney, Jeff O'Hara.

But in court, he admitted to making periodic wire transfers to keep up the ruse surrounding CyberNET.

Company officials knew Huntington watched the operating accounts it maintained for CyberNET, also called Cyberco, to make sure money was coming in.

"I believed (the transfers) would give Huntington a comfort level with the outstanding loan," Roepke said.

Roepke on Tuesday talked about a $265,000 transfer made in September 2004, not long before the facade of CyberNET began to crumble amid a federal probe.

Agents suspecting widespread fraud raided the company's headquarters and, days later, founder Barton Watson fatally shot himself in his Ada home.

Roepke is a college graduate with a bachelor's degree and, according to Brenneman, owns a home outside of the United States.

Roepke was released on a personal recognizance bond, but may not leave the country.

As part of a plea deal, he agreed to cooperate with prosecutors on the ongoing investigation into CyberNET. He faces up to 20 years in prison. No sentencing date has been set.