​South Hero man back in prison over federal fraud cases

Paul Hendler, age 49, of South Hero. Photo courtesy: Vermont State Police.

By MIKE DONOGHUE
Islander Staff Writer
 BURLINGTON -- A South Hero man has begun serving another federal prison sentence -- this time for 3 months -- for failure to make a real dent in a more than $550,000 restitution order for a series of earlier frauds, court records show.
Paul Hendler, 49, had tried an unsuccessful last ditch effort to get out of serving the new 90-day sentence in prison.  He had asked the court to allow him to serve the time at home because he feared he might catch COVID-19 in a federal prison.
A federal judge rejected the idea and ordered Hendler to report to prison earlier this month.  Chief Federal Judge Geoffrey W. Crawford said Hendler had to step up and take responsibility for his shortcomings in not complying with court orders.
“Mr. Hendler’ s relatively short prison sentence - 90 days - follows 18 months of missed opportunities to bring his conduct into compliance with conditions of release,” Crawford wrote in his decision.
“Although Mr. Hendler resumed making payments towards his restitution obligation in the fall and winter of 2020, he has not cooperated with his probation officer in making regular, accurate disclosures of his financial status,” Crawford said.
“The jail sentence is intended to send a clear message that Mr. Hendler has an important obligation to comply with his conditions of supervision,” the judge wrote.
As of January, Hendler had paid only $9,023 in restitution since he was first indicted about 9 years ago, court records show.
A federal judge had sentenced Hendler in May 2015 to 27 months in prison, followed by three years of supervised release.  Hendler also was ordered to make $555,244 in restitution to nine persons and businesses that he defrauded, court records show.
Hendler, who was living in Woodstock at the time, was indicted by a federal grand jury on 14 felony counts charging him with mail and wire fraud, interstate transportation of stolen money, forgery and engaging in monetary transactions involving more than $10,000 of criminally derived property, records show.
As part of the sentence, the court ordered Hendler to pay full restitution to the victims named in the indictment along with others of several additional frauds Hendler committed, court records show.  The prosecution agreed to drop 12 felony counts when he admitted to two charges.
The Federal Bureau of Prison released Hendler on April 10, 2017.   By July 12, 2019, a revocation of release petition was filed by his probation officer, Jon Hansen.
Among the charges was Hendler had been arrested on a new felony --  sexual assault on a woman in Chittenden County in June 2019.  Hansen also cited Hendler for failing to pay at least 10 percent of his gross monthly wages toward the $555,244 restitution order, refusal to provide his probation officer with access to financial records and failure to report to his probation officer as required.  In December Hansen also added another violation count of Hendler opening up a credit card account without approval of the probation office.
Hendler eventually admitted to 4 of the 5 federal violations on Jan. 8, records show.  The violation count centering on the sexual assault arrest was discontinued after Hendler reached a plea deal with the prosecution to drop the felony charge.
One of the victims in the indictment, JavaPop Inc. in Woodstock, which manufactured carbonated coffee-based drinks, was forced to close due to the fraud, officials said.
Hendler founded JavaPop in 2005 and was fired in 2008 after the fraud reports surfaced, records show.  They noted Hendler subsequently worked for and defrauded Green Mountain Digital of Woodstock.
In 2011, JavaPop’s then-CEO told the Valley News, a West Lebanon, N.H. daily newspaper, that the company’s losses from Hendler’s fraud directly related to closing the business. JavaPop was forced to lay off employees after the losses were uncovered and eventually closed.

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