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Former GF broker jailed, faces theft, fraud charges in Grafton

Ross Owen Haugen was a wizard of a salesman who could charm anyone with his "aw-shucks smile and platinum blonde hair," said a former colleague of the former Grand Forks broker.

Ross Owen Haugen was a wizard of a salesman who could charm anyone with his "aw-shucks smile and platinum blonde hair," said a former colleague of the former Grand Forks broker.

The once successful investment broker now faces criminal charges in North Dakota and a federal civil case against him in Georgia.

Haugen, 56, was arrested Wednesday night in Minneapolis. He's lived in Plymouth recently, a northwestern Twin Cities suburb.

He will remain in the Hennepin County jail until Walsh County authorities in Grafton, N.D., bring him back in a few days to face charges he stole nearly $3.5 million from seven people there in 2006 and 2007.

Walsh County State's Attorney Barb Whelan has charged Haugen with 48 counts of property theft and fraudulent dealings as an unlicensed securities salesman.


He will be arraigned in state district court in Grafton within a few days, Whelan said Thursday.

Haugen has been living in Plymouth after losing several jobs as a broker over the past decade or more and getting on the radar screen of the Securities and Exchange Commission. But until recently, he still was trading on personal relationships he made, sometimes through religious circles, with people in Walsh County more than 15 years ago, authorities say.

Haugen, originally from Willmar, Minn., was active in the large Faith Evangelical Free Church in Grand Forks in the 1990s, and he had a big house down by the Red River near the Grand Forks Country Club.

He worked as a broker for the Edward Jones firm in Grafton in the late 1980s and early 1990s, then moved to work for Merrill Lynch in Grand Forks.

By 2001, he had been fired at Merrill Lynch,for breaking internal company ethical rules, said a former colleague of Haugen, who spoke to the Herald under the condition of not being identified.

He left Grand Forks about 2004 for the Twin Cities, no longer licensed to sell securities.

But he kept on selling securities in what became fraud, a Ponzi scheme in which he lied about the returns investments paid but used money from recent customers to pay off previous investors, authorities said.

He was arrested Friday in Minneapolis based on a complaint from Walsh County from an elderly person who had invested $60,000 and never saw it again. Haugen was released Friday but then arrested again Wednesday on charges of defrauding six other elderly people in Walsh County out of about $3.4 million.


It was a Ponzi scheme Haugen sold under the names of Coadum Capital Funds and Mansell Acquisition Co. in 2006 and 2007, said Karen Tyler, North Dakota securities commissioner.

Although Haugen hadn't been registered to sell such securities in North Dakota since he withdrew his registration in 2004 as he faced a revocation hearing, he kept close relationships with the elderly clients who were vulnerable and didn't know he was an illegal agent, authorities said. Haugen hasn't been registered as a securities agent anywhere in the nation since the National Association of Securities Dealers started disciplinary action against him in 2006.

He used church connections to make deals, authorities say.

"Haugen's conduct is reprehensible," Tyler said in a news release. "He has preyed on the elderly, abused their trust and exploited religious commonality to victimize investors for his own financial gain."

In March, a federal judge in Georgia ordered Haugen to pay restitution and fines of $2.6 million f or his role in the overall investment scheme of $30 million run as a Ponzi scheme in 2006 and 2007 by himself and others. Haugen is said to have garnered half of the dough from believing customers, using his superb personal and sales skills.

There isn't much of any money left to be found, authorities have said. The money was invested in offshore trading programs that yielded nothing while Haugen was telling people they were earning 4 percent on their money every month - which would be more than 50 percent a year - authorities said.

Haugen allegedly spent much of the money on his own lifestyle and apparently also used some to pay off earlier investors in the typical Ponzi style.

He also collected hundreds of thousands of dollars in commissions for making the sales to customers.


In addition to the $3.5 million Haugen stole from people in Walsh County, he allegedly took another $3.5 million from other North Dakotans, one official said.

State Securities Department enforcement attorney Mike Daley says some of the Walsh County residents have gotten a total of about $400,000 of their money back, The Associated Press reported.

"I saw a side of him I didn't know," said the former colleague. "He could sell ice cubes to the Eskimos. I heard that even people who had been pissed off at him enough to write letters to Merrill Lynch ... went with him (as clients) when he left. He snowed me, I can tell you that."

Reach Lee at (701) 780-1237; (800) 477-6572, ext. 237; or send e-mail to slee@gfherald.com .

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