United States v. Hansen, No. 14-2188 (8th Cir. 2015)
Annotate this CaseHansen, a farmer, served as a bank trust officer. In 2003, he invested, through Johnson (a stock broker), in the Hudson Fund, a hedge fund Johnson ran with Onsa and Puma. Hansen continued investing with the three. In 2007 Hansen and Johnson formed RAHFCO limited partnership. Hansen served as general partner, but delegated responsibility for executing trades to the Hudson Fund. Hansen misrepresented RAHFCO to investors, directly and through a private placement memo. Hansen prepared and sent investors earnings statements that falsely inflated RAHFCO’s performance. Hansen later testified that he relied on Onsa and Johnson to provide the numbers and never confirmed them. Hansen hired an accounting firm for an audit, but the firm quit after Hansen refused to authorize it to obtain a brokerage statement confirming RAHFCO’s investments. RAHFCO’s law firm withdrew. Johnson was charged in 2007 with securities fraud concerning another company. Onsa was sued civilly for fraudulent securities trading in 2009. Hansen never informed investors of any of these events nor did he attempt to find another auditor. In 2011, RAHFCO collapsed. Convicted of mail fraud, wire fraud, and conspiracy to commit mail fraud and wire fraud, 18 U.S.C. 1341, 1343, 1349, Hansen was sentenced to 108 months imprisonment and ordered to pay $17 million restitution to 75 victims. The Eighth Circuit affirmed, upholding the use of a willful blindness instruction and an instruction on conspiracy.
Court Description: Shepherd, Author, with Gruender and Kelly, Circuit Judges] Criminal case - Criminal law. Evidence was sufficient to support defendant's conviction for conspiracy and mail and wire fraud; no error in giving a "willful blindness" instruction; instruction provided in response to a jury inquiry asking for clarification of the third element of conspiracy - that defendant knew the purpose of the agreement or understanding when he joined the conspiracy - was not erroneous and the instructions as a whole adequately advised the jury on the essential elements of conspiracy.
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