Bismarck, ND - Ross O. Haugen, a former securities agent, was arrested on Friday, May 14, in Hennepin County, Minnesota, on charges of felony theft and securities fraud brought by Walsh County State's Attorney, Barbara Whelan. The charges resulted from an investigation by the North Dakota Securities Department into a complaint by an elderly Walsh County resident that he had invested $60,000 with Haugen on promises of a high return on a safe, short-term investment. In fact, the victim's funds were wired to out-of-state accounts and used for Haugen's own expenses.
Haugen was arrested a second time on May 19, on charges of securities fraud and acting as an unregistered agent in Walsh County in a separate criminal complaint brought by State's Attorney Whelan based on his involvement in a series of fraudulent securities offerings in Coadum Capital Funds and Mansell Acquisition Company in 2006 and 2007. Six Walsh County residents invested over $3,400,000 in the scheme at Haugen's urging. These charges also were the result of a criminal referral from investigators in the North Dakota Securities Department.
The Coadum and Mansell offerings were earlier the subject of a civil investigation by the Securities and Exchange Commission. The SEC found that more than 150 investors located throughout the United States and Canada had more than $30,000,000 invested in the scheme. The SEC action resulted in a civil order in the United States District Court for the Northern District of Georgia for disgorgement of commissions paid to Haugen and his business entities in the amount of $1,368,059.42. The Court also ordered Haugen to pay a civil penalty of $1,242,742.79. A court-appointed receiver has recovered only a small percentage of the investors' funds.
North Dakota Securities Commissioner Karen Tyler stated, Haugen's conduct is reprehensible - he has preyed on the elderly, abused their trust and exploited religious commonality to victimize investors for his own financial gain.
Haugen has not been registered as a securities agent in North Dakota since he withdrew his registration in 2004 as revocation proceedings were pending before the Securities Commissioner. He has not been registered as a securities agent in any other state since the National Association of Securities Dealers (NASD), initiated disciplinary action against him in December 2006.
Haugen's actions in continuing to sell securities in North Dakota after losing his registration here are clear violations of the North Dakota Securities Act. Before investing in any securities offering, investors should check with the Securities Department to make sure that both the investment itself and the person making the offer are properly registered in this state, Tyler said.