Acting United States Attorney Randolph J. Seiler announced that the Eighth Circuit Court of Appeals, in a published opinion issued June 30, 2015, affirmed all 26 felony fraud convictions and the nine-year federal prison sentence of Randal Kent Hansen. Hansen, age 67, is originally from Doland, South Dakota, and most recently from Sioux Falls.
Hansen was convicted in a January 2014 federal jury trial and sentenced in May 2014 by U.S. District Judge Karen E. Schreier. Hansen was convicted for Conspiracy to Commit Wire Fraud and Mail Fraud, four counts of Wire Fraud, and twenty-one counts of Mail Fraud.
The case involved the investigation of a hedge fund known as RAHFCO Funds, Limited Partnership, and RAHFCO Growth Fund, Limited Partnership. As president of the fund, Randy Hansen collected money from over a hundred investors that totaled over $20 million dollars. Investors were told that only a small portion of the money would be used to make trades on the futures market for the S&P 500, that the rest was securely invested in government securities, and that they could withdraw funds at will. The fund operated from 2007 until April 2011, when one of Hansen’s co-conspirators turned himself into authorities. The investigation revealed that the fund was operating in a Ponzi-like fashion, with new investor money being used to pay off existing investors seeking to withdraw funds. As part of his sentence, Hansen has also been ordered to pay over $17.5 million in restitution to his victims.
Hansen appealed his convictions, arguing that there was insufficient evidence presented of Hansen’s knowledge that the funds were a fraud. The Eighth Circuit Court of Appeals disagreed, citing Hansen’s role as a founder and general partner of one of the fraudulent funds. The appellate court discussed numerous examples of evidence presented at trial that Hansen made false statements directly to investors about the fund’s investment strategy, investor balances, and its performance. At multiple times, Hansen also falsely assured investors that the fund was secure, misrepresenting to them that it was being audited and that balances were being verified by several accounting firms. These sorts of affirmative misrepresentations, the court concluded, provided sufficient evidence for the jury to conclude that Hansen knew the fund was fraudulent and that he intended to defraud investors.
Acting U.S. Attorney Seiler lauded the decision. “The appellate court’s decision, affirming more than two dozen felony convictions, brings to a close our successful prosecution of this complex, multi-million dollar fraud scheme. Hansen’s scheme left many victims without their life’s savings. His prison sentence and hefty restitution judgment should send a clear message about the high price of greed and deception," said Seiler.
This case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Jeffrey C. Clapper prosecuted the case.
Source: U.S. Department of Justice, Office of the United States Attorneys
