Hunter Hanson has pleaded guilty.
A former North Dakota grain trader who admitted to bilking farmers, elevators and commodity brokers out of millions of dollars was sentenced Tuesday to eight years in federal prison.
U.S. District Judge Daniel Hovland, who imposed the prison sentence, also ordered Hunter Hanson to pay $11 million in restitution.
Hanson, 22, who became involved in the business shortly out of high school, pleaded guilty in July to wire fraud and money laundering for defrauding about 60 sellers in North Dakota, Minnesota and Canada. U.S. Attorney Drew Wrigley of North Dakota said Hanson "undermined generations" of hard work by families in agriculture.
"These losses would be financially debilitating at any time, but they are back-breaking at such a challenging time for our critically important ag sector," Wrigley said in a statement.
Court documents show that Hanson, of Leeds, contracted with the victims to buy crops and either failed to pay them or sent them checks that bounced. He allegedly laundered money between his multiple bank accounts and other businesses. At one point he had 11 identified bank accounts associated with his companies and owed one bank more than $460,000.
Authorities say Hanson often bought crops from farmers and elevators above the per-bushel market value and then sold them below market value to further the Ponzi scheme. In doing that, Hanson lost more than $131,000 in transactions between McClusky Coop Elevator and Osnabrock Farmers Coop Elevator.
Wrigley said the government will attempt to locate any of Hanson's proceeds and "offset the losses to the degree possible."
The North Dakota Public Service Commission shut down Hanson's Devils Lake-based businesses last year after it received multiple complaints from farmers and others. The case led state lawmakers, upset that Hanson received a license when he allegedly had no grain marketing training or experience, to transfer grain regulatory authority from the PSC to the state Agriculture Department.