A former Council Bluffs man is on trial in Nebraska accused of hiring an acquaintance to burn down his troubled manufacturing business near Fort Calhoun, Neb., to gain $4 million in insurance money. The Daily NonPareil reports 52-year old Thomas Schropp is being federally indicted on six criminal charges related to the arson of PK Manufacturing, a Nashville, Neb., company he co-owned with his uncle. The trial started Tuesday.

Prosecutors say the business was intentionally set on fire about 3 a.m. on Nov. 20, 2008. Jurors will hear from more than 30 witnesses during the trial, which is expected to last two weeks. Assistant U.S. Attorney Russ Mayer laid out the state’s evidence against Schropp during opening statements Tuesday, saying PK Manufacturing had been heading downhill for some time.

He pointed to the fact Schropp lost his largest customer in late 2007, causing his sales to drop almost 50 percent. His tax returns for the tax year 2007-2008 showed Schropp lost $254,000 in income due to his business. In 2008, Schropp owed nearly $5 million in bank loans. Mayor said Shropp instructed one of his employees to inflate the value of his inventory so bankers would continue to work with him, and right before the business burned, Schropp had unsuccessfully attempted to sell it.

A Crime Stoppers tip led the Washington County Sheriff’s Office to methamphetamine addict Billy Richards and his live-in girlfriend, Julie Winkelbauer. Schropp asked Richards, a painter, to stop by his business during the summer of 2008. Mayer said when Richards arrived at PK Manufacturing, Schropp told him this job wasn’t about painting, it was to torch the business. Schropp allegedled offered the man $20,000 to do the job.

Richards has pleaded guilty to malicious destruction of a building by fire and is facing seven to 9½ years in prison. He is hoping to receive a reduced sentence in exchange for his testimony against Schropp.Winkelbauer agreed to testify only if the government would not prosecute her. After the fire, Schropp filed a claim with his insurance company for about $4 million. The insurance company later denied his claim. Fire and insurance investigators declared the fire suspicious but couldn’t determine the cause of the fire. The trial continues today (Friday) and next week in U.S. District Court in Omaha.