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Press Release

Inglewood, California Man Sentenced to Five Years in Federal Prison for Conspiracy to Commit Mail and Wire Fraud

For Immediate Release
U.S. Attorney's Office, Eastern District of Washington

Spokane – Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced Erick Halkier Hansen, age 58, of Inglewood, California, was sentenced today by Chief United States District Judge Thomas O. Rice to five years in federal prison as a result of his conviction for Conspiracy to Commit Wire and Mail Fraud. Chief Judge Rice also ordered Hansen to pay $2,872,300 in restitution to 51 investors who lost money as a result of Hansen’s criminal activity and required Hansen to serve three years of supervised release upon the completion of his sentence. Previously, on June 9, 2016, Chief Judge Rice also sentenced Sean Michael Borzage Boyd of Provo, Utah to 3 years in federal prison for his role in the same conspiracy. Chief Judge Rice ordered Boyd to pay restitution along with Hansen.

On March 24, 2016, the Defendant pled guilty to Conspiracy to Commit Wire and Mail Fraud with regard to his operation of BlueStar Digital Technologies, Inc. (“BlueStar”) and related entities in Spokane, Washington from October, 1, 2010 through January 1, 2014. Hansen was the President and Chief Executive Officer of BlueStar during the timeframe alleged in the indictment. According to information disclosed during court proceedings, the conspiracy involved Hansen’s solicitation of funds from investors across the United States for three separate schemes.

First, in 2010 Hansen took funds from investors based on representations that BlueStar had a contract for the exclusive distribution rights to video footage of a recently deceased celebrity (the “Celebrity Footage”) and that BlueStar would replicate large numbers of Blu-ray Discs containing the Celebrity Footage for profit. Hansen knew, however, that: 1) BlueStar, was not capable of replicating large numbers of Blu-ray Discs at that time and therefore could not perform under the contract regarding the Celebrity Footage; and, 2) BlueStar took no meaningful steps to undertake any production or distribution of the Celebrity Footage on Blu-ray Discs.

Second, in 2012 Hansen took funds from investors based on representations that BlueStar had a contract with a film company to release an animated film that BlueStar would exclusively distribute, including through distribution on Blu-ray Discs. Hansen continued to take funds from investors after the contract with the film company expired based on BlueStar’s failure to perform under the contract.

Third, also in 2012, Hansen signed a non-binding memorandum of understanding with an individual and another film company wherein BlueStar and the film company agreed to explore the possibility of the film company investing in BlueStar. Hansen knew that the memorandum of understanding with the film company was not binding, but continued to collect investor funds as if the deal were imminent. The deal never materialized.

Chief Judge Rice found the total loss from Hansen’s criminal activity to be $2,872,300.

Michael C. Ormsby said, “Today’s sentence reflects the seriousness of this major fraud scheme. I commend the FBI, the IRS-CID, and the Washington State Department of Financial Institutions for their tireless efforts in pursuing the investigation of this case. Prosecuting fraud matters is a priority for the United States Attorney’s Office here in the Eastern District of Washington.”

The investigation of this case was conducted by: (a) the Federal Bureau of Investigation, (b) the Internal Revenue Service, Criminal Investigation, and (c) the Washington State Department of Financial Institutions. The case was prosecuted by James A. Goeke and George J.C. Jacobs III, Assistant U.S. Attorneys for the Eastern District of Washington.

Updated September 8, 2016

Press Release Number: 14-CR-0184-TOR