WILLISTON — A South Dakota man, whose girlfriend admitted to being a Russian agent who tried to influence U.S. policy as the 2016 election approached, allegedly defrauded investors in several fake ventures, including one to develop housing for oilfield workers in western North Dakota, according to federal documents.
FBI documents unsealed this week detail accusations against 57-year-old Paul Erickson, a Sioux Falls, S.D., businessman. In South Dakota’s U.S. District Court, Erickson faces one count of wire fraud and 10 counts of money laundering. He first appeared in court Feb. 6 on the indictment and has since been released on bail.
An affidavit supporting an application for a search warrant was filed in April 2018. The document — unsealed almost a year later on Monday — alleges Erickson defrauded 76 investors out of about $2.2 million. Some of the money was supposed to go toward a venture in western North Dakota's oil patch.
Erickson allegedly solicited investors as early as 2013 for the venture to build single-family homes in Williams County, according to his indictment. He promised high returns, but he never bought any property in the oil patch, court documents said.
After looking into bank accounts, FBI agents determined investments did not go to the North Dakota project or other ventures. "Instead, the money was used for flights, motels and other personal expenses incurred by Erickson," court documents said.
Some of the money went to his 30-year-old girlfriend, Maria Butina, according to the affidavit for a search warrant. Butina has pleaded guilty in federal court to illegally being a foreign agent in the U.S. She admitted to working with an American political operative to create relationships with the National Rifle Association, conservative leaders and U.S. presidential candidates in 2016, including President Donald Trump, according to the Washington Post.
In exchange for a lighter sentence, she agreed to cooperate with investigators.
More detail than previous documents
Few details were released in Erickson's initial indictment, but the affidavit unsealed Monday describes how the FBI was tipped off in 2016 to Erickson’s alleged scheme.
A woman selling land in Williston reported Erickson to federal agents, according to the document. He wanted paperwork to evaluate the possibility of investing in the land but never did so, the document said.
Then investors who said they paid Erickson for the land called the woman, which indicated to her that fraud was afoot, the document said.
It doesn’t appear Butina alerted officials to Erickson’s alleged scheme, but court documents and statements by attorneys in Butina's criminal case suggest she has cooperated with the investigation into Erickson's alleged financial crimes.
The affidavit released Monday also alleges Erickson formed two Sioux Falls-based companies — Compass Care and Investing with Integrity — in attempts to defraud investors.
The first business claimed to be building retirement homes, while the latter was founded to create a wheelchair that would allow patients to use the bathroom without getting off the chair, according to court documents.
The indictment claims Erickson initiated his scheme as early as 1996. The Brookings (S.D.) Police Department took a report in 2014 and investigated Erickson's investments in the oil patch.
At the moment, it doesn’t appear that Erickson will face federal charges in North Dakota.
It’s unclear whether Butina knew about the scheme. The U.S. Attorney’s Office in South Dakota declined to answer questions about how much information she received, if she was involved in the scheme and if others are being charged in the case.
Erickson has not been charged in connection with Butina’s case, but court documents in her case describe Erickson as her co-conspirator, the Rapid City Journal reported.
Erickson reportedly met Butina in 2013 while she was running a pro-gun rights group in Russia, the Journal reported. During their relationship, according to documents in her criminal case, a high-ranking Russian official directed Butina's efforts to infiltrate and attempt to influence American political groups.
Erickson arranged for Butina to speak at several events in South Dakota before she was arrested in July, including at University of South Dakota in Vermillion, according to the Washington Post. Erickson grew up in that town.
Erickson's lawyer, William Hurd, previously told the Post his client "is a good American. He has never done anything to hurt our country and never would."
Hurd and Clint Sargent, Erickson's attorney in the federal fraud case, did not return messages left by The Forum seeking comment.
Erickson also has caught the attention of national leaders. In early March, U.S. House Judiciary Committee Chairman Jerry Nadler demanded Erickson and others release documents that could tie Trump to Russia.
"This is a critical time for our nation," Nadler, D-N.Y., said in a March 4 letter to Erickson. "President Trump and his administration face wide-ranging allegations of misconduct that strike at the heart of our constitutional order."
U.S. Attorney Willliam Barr wrote March 24 in a letter to congressional leaders that a nearly two-year investigation headed by special counsel Robert Mueller found no one from Trump's campaign worked with the Russian government to influence the election. The investigation also could not conclude whether Trump obstructed justice, Barr said.
Barr held a news conference Thursday morning, April 18, regarding the release of the long-awaited Mueller report. A redacted version of the report was to be released Thursday.
Butina's sentencing hearing is set for April 26. She faces a maximum punishment of five years in prison and deportation to Russia.
The Rapid City Journal and Washington Post contributed to this article.