Prosecutors want prison for South Dakota man linked to agent

November 26, 2019

SIOUX FALLS, S.D. (AP) — Federal prosecutors are seeking prison time for a longtime conservative operative who was linked to a Russian agent.

Paul Erickson is scheduled to appear before a federal judge Tuesday to plead guilty to wire fraud and money laundering. The charges are for fraudulent investment schemes he operated for many years, not his relationship with the agent.

Erickson also faces fines up to $750,000, plus possible restitution to those he defrauded — though it’s not clear if his victims will ever see any money.

Erickson has struggled to make court-mandated payments in the past. In 2016, he failed to make a $20,000 payment that was part of a lawsuit settlement brought by an investor in a wheelchair scheme. His first lawyer in that litigation quit after Erickson’s checks bounced. His second lawyer also withdrew, citing “a communication breakdown.”

The alleged crimes are unrelated to the charges against Maria Butina, who was deported in October after admitting she sought to infiltrate conservative U.S. political groups and promote Russia’s agenda. Erickson and Butina had a romantic relationship.

The money laundering charge centers on a $100,000 loan that Erickson received to develop land in North Dakota. Prosecutors said he transferred $1,000 of that money to a person listed as “M.B.” in court documents.

Prosecutors said Erickson concocted multiple investment schemes from 1996 to August 2018, including recruiting investors for a string of elder care homes; developing a wheelchair that allowed a person to use the bathroom from the chair; and home-building in North Dakota’s booming oil fields. He operated his schemes from Sioux Falls.

When federal prosecutors charged Erickson with 11 counts of wire fraud and money laundering in February, he initially pleaded not guilty. Erickson has agreed to change his plea to guilty on two of the charges.

One of the investors drawn into Erickson’s real estate scheme was David Gillian, the husband of former State Department official Andrea Thompson. Before leaving the State Department in September, Thompson oversaw arms control negotiations with Russia. Gillian sent Erickson $100,000 to invest in developing homes in North Dakota in 2017. He is currently suing Erickson over the payment.

Erickson’s lawyer, Clint Sargent, declined to comment ahead of the change-of-plea hearing. Last week, Sargent noted that the deal would “resolve all charges” against Erickson over many years “and this ordeal for Mr. Erickson will come to an end.”