Hansen sentenced to 48 months in federal prison after pleading guilty to financial fraud scheme

 

Date: December 4, 2020

Contact: newsroom@ci.irs.gov

Salt Lake City – Theodore Lamont Hansen of Highland, Utah, who pleaded guilty to money laundering and bank fraud in May in connection with a financial fraud scheme, will serve 48 months in federal prison. U.S. District Judge Robert L. Shelby imposed the sentence Thursday afternoon in U.S. District Court.

"Mr. Hansen has made a lifestyle of fraud – whether it was fraud against investors or fraud against a financial institution. The IRS, working with our law enforcement partners, have finally put an end to his lifestyle of fraud," IRS Special Agent in Charge Tara Sullivan said.

Hansen was ordered to pay $1,435,913.44 in restitution as a part of the sentence.

As a part of a plea agreement reached with federal prosecutors, Hansen admitted that he devised a scheme to defraud an individual of $1 million using fraudulent promises and omitting material facts. Hansen convinced the victim of the scheme, identified as E.L. in the plea agreement, to give him the money by representing he would use the funds to purchase full ownership of Seven Peaks Water Park in Provo. Hansen told E.L. he would return the money if the transaction could not be completed within 24 hours. In exchange for the investment, E.L. was promised $23.5 percent ownership in the waterpark.

Hansen admitted that he used the $1 million for things inconsistent with his representations and never returned the money to E.L. For example, he used $28,000 for a purchase from RC Automotive.

The bank fraud conviction stems from a large check-kiting scheme involving Bank of the West and Deseret First Credit Union. The check-kiting involved at least 10 different companies and got so complicated in the end that Hansen and a colleague would go to Bank of the West every morning to sort out each transaction. The bank, according, to the sentencing memo, discovered the kite and put an end to it. Bank of the West was left with a loss of more than $1.6 million. Hansen asked an elderly friend to cover the loss, but the friend would only agree to pay a portion of the amount, taking the loss amount down to $585,913.44.

"Fraudsters are very good at what they do. They are extremely convincing and will work hard to gain your trust. Driven by greed, many reoffend," said Special Agent in Charge Paul Haertel of the Salt Lake City FBI. "The FBI will aggressively investigate these crimes, but we urge the public to do their part too. When considering investment opportunities, do your due diligence and ask some tough, detailed questions about a person's financial history. The public is also encouraged to check court records and the state's White Collar Crime Offender Registry online at utfraud.com."

In a sentencing memorandum, federal prosecutors told the court that "Hansen is a prodigious fraudster whose only real occupation is convincing others to give him money and property." Hansen was convicted by the State of Utah for selling unregistered securities and placed on probation for 36 months. As a part of his conditions of release, Hansen was required to disclose to any prospective investor in writing that he had approximately $45 million in outstanding judgments against him – some thing he did not do in the case prosecuted by federal prosecutors.

"Another Utah fraudster has come to justice in federal court. In this case, a repeat offender ignored a merciful opportunity to separate from a life of crime given to him by a state court. It is unfortunate that more victims had to pay such a steep price for this swindler's federal crimes after he ignored the state court's orders in his previous conviction. There are far too many fraudsters in Utah who are truly wolves in sheep's clothing, and Utah investors must be more mindful when parting with their hard-earned savings," U.S. Attorney John W. Huber said today.

The investigation leading to the sentencing was conducted by the IRS-Criminal Investigation and FBI.