It’s been just over a year since David Gustafson suddenly, but gracefully, resigned as editor and publisher of The Pine Belt News, Hub City Spokes and other local publications. Now we know why.
Circuit Court documents filed from March – May of 2021 indicate that Gustafson has admitted to violating his fiduciary responsibilities and the trust of his employer, Hattiesburg Publishing, Inc., by taking at least $288,228 for his own benefit.
He did so by carrying out several unauthorized financial transactions: writing single-signature checks, using the company’s credit cards and PayPal account, and helping himself to cash. He also hid, withheld, and misrepresented information and documents to prevent Hattiesburg Publishing from discovering his unauthorized financial activities.
However, Hattiesburg Publishing did discover his fraudulent activities and filed a complaint in Circuit Court this past March.
A LITTLE BACKGROUND
During his almost 11-year tenure, Gustafson acquired a reputation in the Pine Belt as a respected, community-oriented journalist. He oversaw the award-winning work of staffers at the Lamar Times, the Petal News, Camp Shelby Reveille, the Hattiesburg Post, Signature Magazine and Pine Belt Sports. He and his staff originated the well-known Best of the Pine Belt Award Show.
In his July 1, 2020 final column, Gustafson outlined the growth of the organization’s publications, the awards they won and the roles they play in the Pine Belt community. He thanked readers for their patience, grace, friendship and support.
“As for me, I can’t reveal what my future plans are quite yet, but I’m looking forward to continuing my work as a writer and a storyteller, and I’m looking forward to contributing in new, meaningful ways,” he wrote. “And most of all, I look forward to doing it right here in the Hub City. I’m an Okie by birth and a Mississippian by choice.”
PAYBACK REALLY IS HELL
As of March 2021, when the complaint was filed, Gustafson had repaid Hattiesburg Publishing $168,000. Of that amount, $120,000 was in paychecks Gustafson had not cashed and the remaining $48,000 was from his 401K.
The complaint notes that Gustafson still owes $120,220. It also asks for a punitive judgment of treble that amount: Hattiesburg Publishing stated that it continues to incur financial losses due to attorneys’ fees, loss of interest, remedial business loss, and interest. (The request was later amended to ask repayment of $120,228, as well as $40,076 for attorneys’ fees and another $120,228 in punitive relief.)
A summons was delivered to Gustafson March 11, 2021, requiring written response to the complaint within 30 days. He did not respond, and Hattiesburg Publishing requested an entry of default April 1, 2021. The entry of default is dated April 15.
Hattiesburg Publishing filed a motion for default judgment April 23, 2021. The document notes that Gustafson has admitted legal liability and guilt for fraud, breach of fiduciary duties, theft and/or conversion, and other charges. It also states that Gustafson has admitted legal liability for the actual, compensatory, consequential, and punitive damages described in the complaint.
The motion requests a total of $280,532 plus all applicable interest and court fees.
The Hon. Robert B. Helfrich considered the motion and all applicable materials before signing the final judgment on April 30, 2021. His findings, as listed in the final judgment:
- Defendant David Gustafson is in default and has thus admitted all allegations of the Complaint, including the allegations of fraud and breach of fiduciary duties.
- Actual loss damages of Plaintiff are assessed and awarded in the specified amount of $120,228.
- Punitive damages against Defendant are assessed and awarded in the specified compromised prayer amount of $120,228.
- Attorneys’ fees are assessed and awarded in the amount of $40,076.
Helfrich’s final judgment was filed May 3, 2021; it awards Hattiesburg Publishing, Inc., $280,532 plus applicable interest and court fees.
HPNM reached out earlier this week to Wyatt Emmerich, director and president of Hattiesburg Publishing, Inc. Emmerich stated that he has no comment on this matter.
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