A former Grand Forks stockbroker will appear in court in Grafton, N.D., this afternoon on charges he defrauded seven investors in Walsh County of nearly $3.5 million in 2006-2007.
Ross Haugen, 56, is asking a judge to review his bail, which was recommended at $3 million cash when he was arrested last week in the Twin Cities. He was transported from the Hennepin County jail to Grafton this week.
Haugen was arrested May 14 in the Twin Cities, where he has lived for several years, on charges involving an alleged $60,000 investment lost by a Walsh County resident, said Barb Whelan, Walsh County State's Attorney.
A judge released him pending trial, but Haugen was arrested again May 19 on 54 counts filed by Whelan involving six more people in Walsh County who allegedly lost more than $3.4 million invested with Haugen.
Whelan said Haugen used long-term associations bred largely through church circles to convince elderly and vulnerable victims to invest in his scheme.
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The North Dakota Securities Commissioner, Karen Tyler, said the criminal complaint by Wheland is based on Haugen's part in "fraudulent securities offerings" in Coadum Capital Funds and Mansell Acquisition Co., in 2006 and 2007.
Whelan said Haugen basically ran a Ponzi scheme in which he lied to investors about what he did with their money, and spent it instead of investing it to earn high returns he promised of more than 50 percent per year.
His criminal prosecution in Walsh County parallels civil action against him by federal authorities for what they describe as a scheme in which Haugen and others collected more than $30 million from 150 investors across North America. Haugen himself sold about half of the offerings, authorities said.
A federal judge earlier ordered Haugen to repay $1.4 million in allegedly fraudulent commissions he collected and to pay a $1.24 million penalty.
Little of that has been paid, authorities said.
Haugen faces years in prison if convicted of the criminal charges in Walsh County.
Haugen worked for the Edward Jones firm in Grafton in the late 1980s and early 1990s, and for Merrill Lynch in Grand Forks from the mid-1990s until he was fired in 2001. He effectively was forced to give up his license to sell securities anywhere in the U.S. several years ago because of pending actions against him by authorities.
The Walsh County investors cited in the criminal case recovered a total of about $400,000 of their investments.
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Reach Lee at (701) 780-1237; (800) 477-6572, ext. 237; or send e-mail to slee@gfherald.com .
