A Hugo man has pleaded guilty to embezzling more than $1.3 million from his employer and spending it on gambling trips to Las Vegas, luxury cars and a boat, officials said Thursday.

Leon Keener, 55, knowingly devised and participated in a scheme to embezzle $1,314,633 from I-State Truck Centers in Inver Grove Heights from 2015 through 2022. In his role as service manager, Keener had managerial oversight for the financial operations at I-State.

Keener’s scheme involved misappropriating insurance reimbursement checks for supplemental repairs by writing off the supplemental repair work as a loss, indicating in the accounts payable system that the insurance company had refused to reimburse the supplemental repair, according to court documents. Keener then deposited the insurance reimbursement checks – $562,000 in all – into a personal bank account under his control, officials said.

Keener concealed the embezzlement “by directing his employees to provide him directly with any checks received from insurance companies, cutting out the administrative and accounting employees on staff,” officials said.

Keener embezzled another $751,000 from I-State by generating and submitting false vendor-payment requests, which he diverted for his own use and benefit, officials said. Many of the bogus requests for payments were for a shell company that Keener created and controlled called “CR Services,” which he added to I-State’s accounts-payable system in 2012, before the system required verified vendor identification, officials said.

All of the vendor and insurance reimbursement payments were facilitated using the mail, officials said.

Keener used a bank account opened in the name of CR Services to pay personal expenses, officials said. He also transferred funds from the CR Services account into his personal bank account.

Keener pleaded guilty Wednesday to one count of mail fraud in U.S. District Court in Minneapolis before Judge Ann Montgomery. A sentencing hearing will be scheduled at a later time.

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