Sioux Falls Man Sentenced for Wire Fraud and Money Laundering
United States Attorney Ron Parsons announced that a Sioux Falls, South Dakota, man convicted of Wire Fraud and Money Laundering was sentenced on July 6, 2020, by U.S. District Judge Karen E. Schreier.
Paul Erickson, age 58, was sentenced to 84 months in federal prison, followed by 3 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $200. Restitution has been deferred for 30 days.
Erickson was indicted by a federal grand jury on February 6, 2019. He pled guilty on November 26, 2019.
The conviction stemmed from incidents when Erickson, who solely operated a business venture to develop land in the Bakken oil fields in North Dakota, became acquainted, through his business, with several individuals with whom he developed strong professional and personal relationships. He approached many of those individuals about investing in his business. However, he falsely represented to investors that he would use the money to purchase real estate and the construction of single-family homes in North Dakota, which he did not do.
On March 1, 2017, he accepted a $100,000 wire transfer that was deposited into his Wells Fargo bank account, which was supposed to be an investment in his business. He told the investor that the money would be used for the development of real estate in North Dakota, and that the amount would be repaid no later than August 28, 2017. However, he did not invest the money received into the Bakken oil fields venture and he did not repay the investor.
Furthermore, from the $100,000 Erickson received on March 1, 2017, he conducted a financial transaction and transferred $1,000 to another person.
“The dramatic upward departure for Mr. Erickson's sentence speaks volumes about the crimes he committed over the vast course of time they occurred,” said FBI Minneapolis Special Agent in Charge, Rainer Drolshagen. “The scope, breadth, and length of his illegal actions spanning more than 20 years involving more than 150 victims was a tall order to investigate but the effort is well worth it with the justice that was meted out today.”
“Investors should be wary about promoters of business ventures that promise to double investor’s money in a short time,” said IRS Acting Special Agent in Charge Adam Steiner. “IRS Criminal Investigation is committed to investigating Ponzi schemes in an effort to protect the financial well-being of the American public. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to put in jail promoters that prey upon trusting investors.”
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Erickson is to self-report by July 20, 2020.