Hanson commutation met with criticism

A prosecutor who was among the first to see the cracks in Hunter Hanson's North Dakota grain trading scheme says it's "ridiculous" that President Joe Biden has commuted Hanson's sentence on wire fraud and money laundering charges.

"It's ridiculous," McLean County State's Attorney Ladd Erickson said. "It doesn't make any sense."

Hanson, now 27, was a grain trader who authorities determined was running a Ponzi scheme and bilked more than 60 victims – primarily farmers and grain elevators – out of at least $11.1 million. U.S. District Judge Daniel Hovland sentenced Hanson in 2019 to eight years in prison plus three years of probation. Under a plea agreement, Hanson agreed to pay $11.1 million in restitution.

Hanson by early 2024 was serving his sentence at a residential reentry center in Minneapolis "which apparently has placed him on home confinement," with a "presumptive release date of July 16, 2025," according to a May 30, 2024, order from Hovland, denying a motion to reduce Hanson's sentence.

Biden on Dec. 12, 2024, granted clemency consisting of 39 pardons and 1,499 commutations to federal prisoners, including Hanson. The clemency order explains that the sentence commutation means the sentence for each of the named prisoners will expire on Dec. 22. The order left intact terms of supervised release for the sentences.

While an announcement about the clemency actions listed reasons for the 39 pardons, no such individual reasons were given for the commutations. A White House fact sheet said the people whose sentences were commuted had been "successfully reintegrated" with their families and communities after being put on home confinement during the pandemic.

For Erickson - barring information he isn't privy to, like a family illness or other extenuating circumstances - commuting Hanson's sentence doesn't make sense.

"I don't know how you could be sympathetic to a guy like that," Erickson said.

The history of the case

The Hunter Hanson case still is fresh in Erickson's mind, because he taught the class in it - literally.

"We actually teach on this case across the state," he said, noting he gave the class to investigators as recently as a month ago as an example of what to look for in financial crimes.

The case started as a felony bad check investigation in McLean County in 2018. Investigators there noted inconsistencies and oddities in Hanson's business practices, Erickson explained. The state Public Service Commission shut down Hanson's grain trading business as McLean County and others investigated.

Erickson explained that Hanson started with small trades. He'd buy grain - with 30 days to actually pay for it - above market value, and then sell at market value, at a loss. For a while, he was able to make enough trades to pay for grain he'd purchased, building confidence in customers in his business. When checks bounced or bills went unpaid, Hanson would blame it on bookkeeping errors. However, Erickson explained that eventually the trades got bigger and Hanson no longer was able to make the payments for grain he had purchased.

Meanwhile, investigators found evidence of Hanson making extravagant purchases and taking expensive vacations.

"Classic Ponzi scheme," Erickson said.

He explained Hanson, after getting his grain business shut down, tried a similar scheme with car dealerships. He bought eight $45,000 pickups in one day, then sold them for $35,000 each. That was the point in which Erickson decided to file a bad check charge and arrest Hanson. The U.S. Attorney's Office later took over the prosecution.

But by the time Hanson was arrested, the damage had been done. Farmers were out tens and hundreds of thousands of dollars. At Hanson's sentencing, farmers spoke passionately about the impact of Hanson's fraud on their farms, with some having to take on other jobs or going out of business entirely.

"Out of all the thousands of people in federal custody, unless I don't know something, to me it's despicable that he got commuted," Erickson said.

In February 2024, Hanson's attorneys moved to have his sentence reduced under a number of factors, including that he had no prior criminal history. They also noted that Hanson had completed 5,579 hours of an electrical apprenticeship while imprisoned at Federal Prison Camp Duluth, in Minnesota.

"He received outstanding performance reviews for the quality of his work, the quantity of his work, his initiative, his interest and eagerness to learn, his ability to learn, his dependability, his response to supervision and instruction, and his ability to work with others," the motion for sentence reduction said. "Hanson took advantage of his time in custody and has positioned himself well to be a safe and productive member of society after he completes his custodial sentence."

Hovland, however, found that one factor in particular did not meet the criteria for reduction of sentence: a requirement that the defendant did not personally cause substantial financial hardship.

"The record clearly shows the Defendant caused substantial, long-term, financial hardship to his victims. The victim impact statements are telling," Hovland wrote. "It would stand common sense on its head to find the Defendant did not cause his many victims substantial financial hardship. This is not a close question. The fraud was immense. When family farmers lose tens and hundreds of thousands of dollars that they will never recoup the loss is gut-wrenching and intergenerational."

Hovland recounted some of the testimony from sentencing in his denial of the sentence reduction, including the story of a family farm that lost $259,000 and was concerned about never again being able to operate as they had prior to the fraud.

"Most of the victims in this case will never recover from the financial setback they have suffered. The loss was heart-breaking, substantial, and clear. To suggest otherwise defies common sense," he wrote.

Hovland in an email to the pardon attorney has spoken out again the commutations in cases over which he presided, including Hanson's. In calling attention to the commutation of Hanson and David McMaster, who was convicted of bank and wire fraud in 2013, Hovland pointed out that neither seemed appropriate for commutation.

"Neither defendant has ever presented any evidence to support a commutation," Hovland wrote. "These cases were very sophisticated and egregious fraud scams that were devastating to honest, hard-working North Dakota victims."

Hovland's email also pointed out that neither he nor prosecutors or victims were contacted about the commutations. Erickson confirmed that no one ever asked his opinion, and he doubts any of the victims in the case would have been supportive of the commutation. Victims still are suffering from Hanson's crimes, he said.

"I know that some people got a percentage of their losses through indemnity funding and stuff like that. But there's no way those victims were made whole," he said. "Some of those people were put out of business."

A simple Google search would have revealed the depths of the fraud in the case, Erickson said.

"I'm just amazed that he would even be considered," Erickson said.