BISMARCK, N.D. — Ladd Erickson has found himself in the middle of a number of scams and confidence schemes in his years as a prosecutor. There was the time a hotel gave out some free rooms and food to a guy claiming to have lost his luggage while working for big names in the entertainment industry. And the numerous times lonely people have been duped out of money by people they met online.
But in recent years, a number of confidence schemes have played out in rural areas, with farmers and ranchers as victims, Erickson said on Oct. 10 at the North Dakota Stockmen’s Association convention.
While Erickson’s presentation was billed as “Scam proofing your ranch and your life,” the McLean County State’s Attorney said a more apt name might have been, “How to talk to your state’s attorney.”
When it comes to scams, Erickson said there is a tendency to assume disputes come down to civil matters. One person owes another money, and that’s that. In those cases, law enforcement and prosecutors don’t get involved.
Erickson was one of the prosecutors involved in the Hunter Hanson case. Hunter, a grain trader, eventually was sentenced to federal prison for running a grain-trading Ponzi scheme that cost farmers and grain elevators in North Dakota more than $11 million. But when Erickson got his first report in the case, it was for a bounced check.
Because the bounced checks were big — hundreds of thousands of dollars — Erickson checked harder into Hanson than into the typical non-sufficient funds check case. He found that Hanson was running numerous businesses and trading increasingly large amounts of grain. The more they looked, the more the authorities were able to determine that the case wasn’t just a bad business deal.
“We started looking into it as a scam,” Erickson said.
Erickson offered tips for farmers and ranchers to avoid being the victim of a scam or confidence scheme.
He said it’s important to know with whom you’re doing business. He cited a case of people who had hired a contractor, who did some initial work, and then took off with an advanced payment for a larger part of the job. When law enforcement looked into the case, they found the contractor had a history of pulling that kind of scam. Erickson recommends checking public records before hiring someone, to look for patterns of bad behavior.
But once a person feels like they’ve fallen victim to a scam, Erickson said it’s important to know how to make the case with a law enforcement official or prosecutor.
“The more information you can put together and articulate, particularly if you can write out a statement giving dates and specifics, checks, contracts, text messages, and lay this out so the initial contact with your law enforcement people, they have a base of information that they don’t have to pull out of you,” Erickson said. “The more that you can put together, the better chance you have of them being able to look at it as a potential criminal case.”
Erickson also advises farmers and ranchers to watch out if they’re doing business with people who are involved in “gambling stuff,” like roving grain traders or cattle buyers who often serve as the middlemen in moving ag products from one place to another. Even though most people in those occupations are on the up and up, it still can be a dangerous financial gig, Erickson warned.
“Know who you’re dealing with … to make sure that they have the capital to withstand for example a COVID outbreak or something where you don’t get the check because they went bankrupt.”