A South Dakota businessman alleged to be a potential link between the Trump campaign and the Russian government was indicted Tuesday on 11 unrelated counts of wire fraud and money laundering in part for allegedly defrauding investors in his assisted living company of more than $700,000, the Justice Department said Wednesday.
Additional actions put the total dollar amount of the alleged fraud at almost $1.2 million.
Paul Erickson of Sioux City, SD, pleaded not guilty to the indictment on Wednesday and was released on bond, according to the Justice Department. A trial date has not been set.
The indictment against Erickson does not mention his alleged ties to the Russian government, but the New York Times identified him as the boyfriend of Russian Maria Butina, who pleaded guilty in December to a charge of conspiring to act as a foreign agent. Erickson, according to the media outlet, is the “U.S. Person 1” referred to in an FBI affidavit as allegedly offering to help arrange a back-channel meeting between Donald Trump and Vladimir Putin. Erickson and Butina together reportedly registered a business called Bridges LLC in early 2016; that business is not mentioned in the indictment.
The indictment centers on three companies solely owned by Erickson, according to the Justice Department: Compass Care Inc. of Sioux Falls, SD, which “was in the business of designing, building and managing assisted living residences,” Investing with Dignity LLC, which “was in the business of developing a wheelchair that allowed people using it to go to the bathroom without being lifted out of the wheelchair,” and an unnamed business “claiming to purchase real property in the Bakken oil field areas of North Dakota for the purpose of building single-family residences.”
From sometime in 1996 through August 2018, the indictment alleges, Erickson “knowingly and unlawfully devised a scheme and artifice to defraud and to obtain money from many victims by means of false and fraudulent pretense, representations and promises” related to the businesses.
Erickson was listed in government filings as the president of Compass Care, and he told investors that the company oversaw 27,000 assisted living, nursing home and apartment beds in 26 states, according to the Justice Department. He also allegedly told investors that Compass Care facilities generated more than $1.7 million in annual gross revenues at full occupancy and that returns on their investments would be paid within a year, by Erickson personally, if necessary.
“It was part of the scheme and artifice to defraud that defendant would obtain money from the victims in exchange for the false impression that the money was being used to invest in Compass Care, when in fact the money paid by victims was not used in the manner represented to them,” the indictment said. Instead, according to the legal document, Erickson used the funds to “personally enrich” himself.
According to the indictment, Erickson deposited $705,471.20 from investors into Compass Care bank accounts in violation of the law. The indictment also lists $348,000 in other deposits to an Investing with Dignity account and to an account in Erickson’s name.
It also said that checks totaling $129,000 constituted money laundering. Two of those checks, totaling $9,000, were received by someone identified as “M.B.” in the indictment.
If found guilty, Erickson faces a maximum of 20 years in federal prison for each count and / or a $250,000 fine for wire fraud and / or a $500,000 fine for money laundering, three years of supervised release, and a payment of up to $1,100 to the Federal Crime Victims Fund. Restitution also may be ordered.
Erickson, described in several media reports as a “conservative political operative,” is not the first person associated with the president to have an assisted living connection. In August, the Justice Department said that Michael Cohen, President Trump’s former personal attorney, concealed more than $200,000 in assisted living-related income, contributing to the tax evasion charges to which he pleaded guilty and for which he faced up to five years in prison.