“All of the framework to do something illegal”
ELIZABETH NELSON:
Welcome to Episode 17 of Hollow Hype. In Episode 16, the bankruptcy of Southtown faces deadlines. If Heidi’s preferred investor comes through, she could walk away with almost $17 million, plus a share in the future project.
The details of what’s happening at Southtown are buried in legal documents. Some of the information comes straight from Heidi, without receipts or verification. In court filings, she presents the project in the most favorable and positive light. For instance, Heidi’s bankruptcy plan includes this background:
[reading]
In 2018, Dr. Poscher focused on development in an underdeveloped Ann Arbor neighborhood, seizing an opportunity to drive impactful urban revitalization. First, and prior to the development, came a twelve unit, ground up townhouse complex, creating a residential anchor. Then came Venue by 4M, a visionary 35,000 square foot space encompassing dining, events, and entertainment facilities. Ultimately, Dr. Poscher formed the [Southtown LLC] to fund and create the development. Ms. Poscher, as Dr. Poscher’s wife and biggest cheerleader, has taken up the mantle to complete the development.
[MUSIC]
My name is Elizabeth Nelson. From 2018 to 2022, I served on Ann Arbor City Council. That experience taught me a lot. Mostly, I learned: people will say just about anything if they think you’ll believe it. This is HOLLOW HYPE.
There’s a lot we don’t know about Heidi’s business in Michigan. The public record includes a confusing array of LLCs and a complicated web of debt, loan after loan of refinancing. In the midst of bankruptcy, Heidi promises inevitable profits and success to potential investors. It’s hard to tell what’s actually going on, what she’s doing.
The record of what Heidi did in California, Ohio and West Virginia is clearer, because she was investigated, indicted, and convicted. Court records unpack all the facts of what happened.
Even after the Michigan Daily exposed her criminal convictions, Heidi has attempted to explain it all away. The details of what she did are remarkable. She was not a hapless victim or an innocent bystander.
[MUSIC]
In 1987, Heidi was convicted of fraud in San Francisco, California. As a broker for Merrill Lynch, she made unauthorized transfers, selling stock and moving money out of a client’s account. The client realized something was wrong when he failed to receive his account statements. For several months, Heidi re-directed his account statements to her own address in Foster City, California.
Federal investigators found that Heidi made seven unauthorized transfers between Merrill Lynch accounts that she controlled. She transferred and sold stocks without permission, directing the proceeds into the account of her roommate and girlfriend, then professional tennis player, Heather Ludloff.
At one point, 400 shares of stock were transferred by mistake to one of Heidi’s clients. Instead of correcting the mistake, Heidi created a new account under a fictitious name and social security number. She transferred the shares to the new account that she controlled.
Heather Ludloff told federal investigators that Heidi was her financial manager. Ludloff knew nothing about the transfers.
After her conviction, Heidi was sentenced to 18 months in prison. She served time in Spokane, Washington.
Just ten years later, Heidi reinvented herself as a community leader in Marietta, Ohio. She got married and had children. When Heidi and her husband opened a brewery on Front Street, their investors included father and son John and Dave Broughton, dentist Bret Frye and prominent attorney John Halliday. Since 2020, Halliday has served as a county common pleas judge in Marietta. In 1997, he was an investor in the Front Street Brewery.
In 1998, Marietta Mayor Joe Matthews appointed Heidi as the city’s development director. Heidi was described as a resident since 1990 and a partner in the Laughery Development Company. The Marietta Times reported that Heidi had lectured in town at Marietta College and worked with the visitors bureau. Her history before Marietta was a bit thinner: Heidi claimed to have earned an economics degree from the University of Michigan, with internships on Wall Street, and at Nike.
Heidi only served as development director for eighteen months before she launched the broadband company Sequelle. By the time she launched Sequelle in August 2000, Heidi had connected to a network of people who were respected and had influence in the State of Ohio.
Heidi had reinvented herself as someone who was trustworthy.
[MUSIC]
A lot of the people who appear in papers and communication about Sequelle are still community leaders or connected to local governments. I’ve made phone calls to many of them. When I ask them about Heidi or Sequelle, I hear a lot of different reactions. One person confidently told me he wasn’t really that involved. When I pointed out that he was on a very short list of people who had been subpoenaed to testify against Heidi, he was quick to explain, “I never testified.” No one testified, because Heidi pled guilty.
In Ohio and West Virginia, Heidi didn’t have access to anyone’s private accounts or stock portfolios. Instead, she focused on government money, federal and state loans and grants from local entities.
In April 2001, two things happened in the same week: Heidi and her husband filed for bankruptcy in Ohio and the Sequelle Foundation incorporated across the river in West Virginia. Soon after, the company reincorporated as the for-profit Sequelle Communications Alliance, and began borrowing money in West Virginia.
The Mid-Ohio Valley Regional Development Council or MOVRC, based in Parkersburg, extended two microloans to Heidi:
$35,000 in May 2001 for “working capital” and another
$15,000 in March 2002 for more “working capital”
The MOVRC would eventually loan a total of $160,000 to Sequelle, and oversee additional funds from the State. When the state of West Virginia awarded Sequelle a $600,000 Small Cities Block Grant, the MOVRC worked with the Wood County commission in Parkersburg to administer it.
There’s a significant papertrail between the MOVRC, the Wood County commission and Sequelle.
Earlier this year, I found that papertrail.
In March 2026, I visited Marietta, Ohio, with a plan to look at public records there and in West Virginia. Among the documents I found was a reference to the Wood County commission. I happened to be in town on the day of their regular meeting.
I decided to show up to that meeting with my notes. At that point, all I had was the names of former commissioners who had voted in support of Sequelle in June 2002.
[MUSIC]
The Parkersburg municipal building is impressive, in a “Government Square” across from the court building. At about 9:15, I walked into the Commission’s meeting room on the second floor. The space was fairly small, but arranged in a familiar way: a raised table behind a wooden rail that separates elected commissioners from the attending public. When I walked in, there were only three people in the room: two elected commissioners at the table and one man seated casually below, between the table and the rail. They were friendly.
“Did you come for the hearing?”
“Um… no. I’m just here to… see the meeting.”
I did not expect the situation to be quite this intimate. I was fairly conspicuous in a University of Michigan t-shirt, with no apparent reason to be there. The men noticed my t-shirt, mentioned recent basketball games (about which I knew nothing), and engaged in small talk. They asked me why I was visiting from Ann Arbor. I immediately referred to my notes.
“I’m trying to track down some people… do you know Robert Tebay?”
“He’s still around but he just retired.”
“Yeah, I saw that. I was hoping to find him. Do you know Rick Modesitt?”
“He hasn’t served on the commission since 2012.”
“What about KD Merritt?”
“He’s dead. Are you a historian? What is this about?”
In retrospect, I must have sounded very strange, name-dropping people from so many years ago. I offered them a bit more background explaining vaguely that there was a woman who had lived in the area, misused grant money, and nearly went to prison. They had questions.
“The woman… what was her name?”
“Heidi… I’m not sure how to say her name, either Lowery or…”
The man in front of the table interrupted me
“L-A-U-G-H-E-R-Y.”
“You knew her??”
“Oh yeah… she had all kinds of big ideas… she got that money and she didn’t do anything with it.”
That’s how I met Marty.
MARTY SEUFER:
I'm Marty Seufer. I'm Wood County Administrator. Started here in 2001 and I was in the IT department until 2006 when I took this job.
ELIZABETH NELSON:
Marty was in the IT department for Wood County when Heidi first brought Sequelle to the County commission. In our conversation, he reminded me again and again, that in 2002 he was there, but he was not in his current position as administrator.
Marty explained the relationship between the Wood County Commission and the Small Cities Block grant or SCBG.
MARTY SEUFER:
They needed a fiscal agent to run their SCBG funds through. So Wood County Commission would be the body that would be chosen as a fiscal agent.
Regardless of the grant, it could be SCBG, it could be anything, but the Mid-Ohio Valley Regional Council will bring a grant into the commission and they'll administer the grant. That's their business. And then they take a cut for administration fees and it's usually grant funded.
ELIZABETH NELSON:
Sequelle submitted receipts to the MOVRC, which were eventually reimbursed by the Wood County Commission.
MARTY SEUFER:
Usually on a grant, there's a scope that they have to meet within that grant. And as they're meeting the scope and they're getting invoices and they're paying invoices, they'll submit those because they want to be reimbursed for them.
So those are usually they would give the regional council copies of the invoices and they would put together a draw down and bring it in the commission, they'd sign it, send it off to Charleston and we get a check back.
Because we're the fiscal agent. And then usually we take that check, deposit it, turn around and write another check of the same amount out to whoever the recipient is.
ELIZABETH NELSON:
Before we sat down for an interview, Marty had looked through meeting minutes to review what had happened.
MARTY SEUFER:
It progressed and she was doing drawdowns and getting money because as you look through our minutes, you'll see where we were doing drawdowns, which is part of the process.
ELIZABETH NELSON:
Marty gave me the minutes for every Wood County commission meeting that referenced Heidi and Sequelle. It was a lot.
[MUSIC]
In June 2002, the Wood County Commission approved Heidi’s application to the Small Cities Block Grant program. Several representatives from the MOVRC attended this meeting in support of Heidi: Jim Mylott, Andrew Woofter, and Fred Rader.
Michael McPeek, from Mountain State College, spoke in support of Sequelle and described its potential for making a positive, regional impact. Heidi boasted about all the jobs that she would create with Sequelle.
The grant application referred to MOVRC plans for a Regional Telecommunications Center. Heidi promised to provide a “Network Operations Center” for Parkersburg that would employ fifty people within three years. The $600,000 Small Cities Block Grant would pay for equipment and software to bring high capacity bandwidth and services to the Mid Ohio Valley.
As soon as the application was approved, the County began signing agreements with Heidi, contingent on the grant award. In July 2002, Heidi signed an agreement with County Commission chair Bob Tebay that committed Sequelle to provide at least 45 new jobs.
Four months after the county commission approved her application, Heidi won the grant.
[Sound of meeting room]
The Governor of West Virginia, Bob Wise, visited Parkersburg, for a public event, awarding the $600,000 grant to Heidi, for Sequelle. Marty was there, taking pictures.
MARTY SEUFER:
I was kind of the unofficial county photographer, so they would call me down if they were doing presentations.
Here's an SCBG grant and the governor's coming down to present.
I don't know that I ever saw him here before.
[MUSIC]
ELIZABETH NELSON:
In 2009, Heidi pled guilty to charges of money laundering. She laundered the money for Sequelle through multiple LLCs, registered in the state of Ohio.
In August 2000, Heidi incorporated Sequelle as a nonprofit in Ohio. One month later, a company called Mentorgen was incorporated outside of Columbus. Heidi eventually served as the CEO of Mentorgen. In 2008, Mentorgen was named in indictments as a defendant, along with Heidi.
In October 2002, Sequelle was awarded the $600,000 Small Cities Block Grant. Two weeks later, a company called Truscom was incorporated in Ohio by Scott Truslow. Truscom’s only client was Sequelle. Scott Truslow later served as COO of Mentorgen. In 2008, Truslow was named in indictments as a defendant with Heidi.
From 2003 to 2004, the Wood County Commission approved multiple draw-downs of the Small Cities Block Grant for Sequelle. They approved about $500,000 in payments to Truscom and Mentorgen.
MARTY SEUFER:
When Regional Council’s involved, they're usually administering the grant and they're bringing the paperwork into the fiscal agent to submit.
ELIZABETH NELSON:
This is what happened with Sequelle: the MOVRC would come to the Wood County Commission with invoices. The Wood County Commission would submit these invoices to the state. That was the path for the grant money to go back to Heidi, Truscom, and Mentorgen.
MARTY SEUFER:
Unless she gave fake invoices you don't get drawdown unless she got an invoice.
That's about the only way you can get around because there's a lot of checks and balances and that stuff. So that's about the only way you could get around is to get money out of the grant like that would be to falsify your invoice, because we don't write a check till we get a check from the state. And the state's not going to issue the check until they have the proper paperwork.
ELIZABETH NELSON:
That’s precisely the crime that Heidi committed, with the help of others.
[MUSIC]
In meeting minutes for the Wood County commission, there are multiple reports about Sequelle. Throughout 2004, it was apparently being monitored. In January, Janelle Dotson of the MOVRC gave the commission a Quarterly Employee Status report. In March, Heidi herself reported to the Wood County Commission. At the end of April, the commission received an annual performance report. The next month, community development specialist Angela White Negley told the commission that there were no outstanding issues that needed to be resolved, apart from documenting 45 jobs and auditing the program funds. In June, the commission was told that monitoring reports from the West Virginia Development office had identified no problems.
In July, Janelle Dotson of the MOVRC announced that Sequelle was getting recognition around the country. At that point, it had seven full time employees and one part-time employee. The following month, an auditor with the Community Development division, Anthony T White, audited Sequelle’s financial records and found no problems.
There were, in fact, lots of problems.
[MUSIC]
In 2008, a grand jury indictment outlined a pattern of deception. Heidi had gotten state and federal funds because on multiple loan and grant applications, she failed to disclose her felony conviction and recent bankruptcy. She misappropriated the funds that were supposed to have been used for the broadband project.
The MOVRC and the Wood County Commission administered the Small Cities Block Grant. But Heidi had also been awarded $3.3 million in federal loans from the USDA. By the time she was indicted, Heidi had spent more than $2 million, using the federal money for purposes that were not permitted and did not support the broadband project.
Invoices from Mentorgen and Truscom were funding another company, Sequelle Systems. This extra company was incorporated in 2003 and did work outside of the local broadband project in Parkersburg. The registered office of Sequelle Systems was less than a mile from where Heidi lived on Andrew Hill Place in Columbus.
Heidi had coordinated four different companies in order to launder funds– Mentorgen and Truscom generated invoices, Sequelle Communications Alliance submitted those invoices to the MOVRC for reimbursement, and Sequelle Systems used the money from Mentorgen and Truscom to pay salaries.
The MOVRC and auditors from the West Virginia development office weren’t able to spot what was going on.
So how was Heidi caught? She got caught because once she got money for herself, she walked away.
From 2000 to 2004, Heidi was the founder and CEO of Sequelle Communications Alliance. In 2004, she resigned, moved to Columbus and became CEO of Mentorgen. The Sequelle broadband project was nowhere near completion and the board of directors that Heidi left behind could not proceed. Heidi advised that they should just file for bankruptcy. Instead, they filed a lawsuit.
In 2005, the board of directors for Sequelle filed a complaint in Wood County, including details about how Heidi had misled them, hidden her criminal background, and had embezzled at least $1.5 million from the company. Their lawsuit prompted media attention and multiple newspaper articles. Before that 2005 complaint, almost nobody knew about Heidi’s conviction in California.
[MUSIC]
LARRY MINCKS:
My name is Larry R. Mincks, M-I-N-C-K-S, resident of Washington County since 1942. I have been in law enforcement most of that time. I started out in Air Force Intelligence with an agent for the Air Force joined Vietnam. And after that I came back and I became a state trooper here in Ohio. I left the state police and I went to the Criminal Investigation Division of the US Treasury Department. They are primarily the people who do the enforcement of the Internal Revenue Code.
In 2005, I was elected sheriff.
ELIZABETH NELSON:
Larry served as sheriff of Washington County, Ohio for twenty years– now he works in forensic accounting. When the news about Heidi broke, people in Marietta talked to Larry.
LARRY MINCKS:
I received a call from Sam Cook, who is an old friend and also a county commissioner at the time. And he asked me to come over and talk to him and we sat down in his office and I could tell by the conversation that he was very concerned about what was going on. He said that the county commissioners had elected or voted to give Heidi Laughery $50,000. And he said he didn't feel that they had done all of their due diligence because he did a little bit after that and then had me do some and I found out that she had actually served time in the state of California for some fraud type charges.
I was very close with Sam all during that period of time. I remember he had contacted me and he was very concerned about the $50,000 that the commissioners had given to Heidi. And he asked me to go and speak to Mike Iaderosa, who was with one of the banks. And he said that Mike would have more information and I did contact him. And it was obvious that Mike was very concerned also on what was transpiring. He felt that there was more than met the eye, that she had a tendency or really, it looked like all of the framework to do something illegal.
ELIZABETH NELSON:
Larry contacted a colleague from his days working with the IRS, Jason Gandy.
LARRY MINCKS:
I think Mike Iaderosa may have had some financial sheets, and I conducted a quick analysis of that, and that's why I called Jason, because I thought, "Hey, you've got potential here. It looks like- at least take a look at this case. I think it's a case. I think she's violating the federal statutes.”
ELIZABETH NELSON:
Which federal statutes had she violated?
LARRY MINCKS:
Well, money laundering, 18 U.S.C. 1956 and 57, by, you know, taking funds and not using it for the right purpose and moving it here and there.
What you're looking at, what's going in and what's coming out. I mean, you're putting in mega bucks. And what's the results? What's happening? I mean, you know, she has a good song and dance there, but there's no concrete things that she can point to that's, hey, I've accomplished this. I don't think there was one place that had obtained Wi-Fi, not that I remember.
ELIZABETH NELSON:
Then Congressman Ted Strickland also noticed the press coverage about Heidi. On August 5, 2005, Strickland wrote to Phyllis Fong, Inspector General for the USDA. This is Fong, explaining the job of the inspector general
[Recorded interview]
PHYLLIS FONG:
We in the IG's office conduct audits to make sure that programs are running effectively, that improper payments are not going out the door and we also conduct investigations whenever there are allegations of wrongdoing in a program either by a department employee or by a person who's receiving benefits.
ELIZABETH NELSON:
Strickland sent her five local news articles that had been published about Heidi’s background. In a letter, Strickland asked Phyllis Fong a series of questions: how much money had Sequelle received? Could it be withheld until litigation was resolved? Had Heidi complied with all application requirements? Could the money be traced and recouped if it was misused?
The Marietta Times reported on Strickland’s letter with the headline “Strickland looks into Sequelle finances.”
Just five years earlier, Strickland had been a cheerleader for Heidi. He had participated in the press conference that announced Sequelle. He wrote to the USDA to endorse her application for federal funds. When Sequelle was awarded the funds, his office celebrated it in a press release. Strickland’s 2005 letter impressed me: he didn’t attempt to hide what had happened and he wasn’t worried about how it might draw attention to his own mistake. He used his position to try and address what had gone wrong. He knew that this was his responsibility.
[MUSIC]
Heidi’s case was ultimately handled by federal agents and the West Virginia special investigations unit. The lead investigator, Herbert R Cogar, won an award in 2010 for how he had contributed to the successful prosecution of Heidi, Mentorgen, and her co-conspirators. When Cogar retired in 2014, the Sequelle case was noted as a highlight of his career.
In explaining her past to friends and colleagues in Michigan, Heidi reinterprets it. According to Heidi, her California crimes were a family drama: Heather Ludloff asked her to make the transfers, from her fathers account. The problem with this explanation is that Heidi was not transferring money from Ludloff’s father– she was stealing from the portfolios of other people.
Heidi explains away what happened in Ohio by painting herself as an innocent bystander. According to Heidi, she wasn’t even in charge of the company, other people told her what to do, or by the time things went wrong, she was no longer involved. The public record of Sequelle is very clear, with Heidi at the center.
This month, Heidi is at the center again, lining up investors for Southtown in Ann Arbor. Who will she blame if it doesn’t work out?
Thanks for listening. Visit HollowHype.com to find more information about this episode.
Coming up in episode 18: what’s gone wrong at Southtown is more than a bankruptcy and it’s more than just money. Real people felt the consequences when the city of Ann Arbor trusted Heidi.
