Ex-Fargo investment broker Medhus pleads guilty to 16 felony charges in 'Ponzi' schemeFARGO – A former Fargo investment broker pleaded guilty this morning in Cass County District Court to 16 felony charges in what a state investigator described as a Ponzi scheme that bilked 19 people out of at least $935,000.
By: Dave Olson, Forum News Service, INFORUM, Forum News Service
FARGO – A former Fargo investment broker pleaded guilty this morning in Cass County District Court to 16 felony charges in what a state investigator described as a Ponzi scheme that bilked 19 people out of at least $935,000.
Other than his pleas of “guilty,” Robert Medhus, 65, made no statement this morning in the hearing before Judge Frank Racek.
Medhus will be sentenced after a presentence investigation has been completed.
There is no plea agreement. Prosecutors said they will ask for a sentence of eight years in prison.
Court documents state Medhus took investors’ money for his own use rather than investing it in securities, and then made fake or exaggerated account statements for them on letterhead printed with his company’s name, Associated Financial.
Kelly Mathias, supervisor of investigations for the North Dakota Securities Department, told Racek there are 19 victims in the case who are in their 50s, 60s, 70s, 80s and 90s.
“There’s going to be a lot of psychological damage here,” Mathias said. Because of the bogus financial statements Medhus sent his victims, many believed their investments, now gone, were safe and growing.
“This was money they had counted on in retirement,” Mathias said, adding that in some cases victims were lifelong friends of Medhus.
Mathias, who described the case as a Ponzi scheme, said set of victims involved a son and his parents, who are all bilked by Medhus, losing more than $200,000 in total.
Mathias said the son has yet to tell his parents what happened.
“He doesn’t know how they’ll take it,” Mathias said.
A Ponzi scheme is generally described as a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.
One of Medhus's victims, Marilynn Hannesson, told Racek in court this morning that the nest egg she and her husband had counted on is gone.
“That was our retirement and a legacy for our children, if there should be any left.
“It’s really shattered my faith in mankind,” she said.
Medhus and his attorney, John Goff, declined comment as they left the courtroom this morning.