Vermillion native Paul Erickson, who made headlines last July when his Russian girlfriend, Maria Butina was arrested on charges of conspiring to infiltrate American political groups on behalf of Russia, has been indicted by a federal grand jury on 11 counts of wire fraud and money laundering.
Erickson, age 56, was indicted on Feb. 5. He appeared before U.S. Magistrate Judge Mark A. Moreno on February 6, and pleaded not guilty to the indictment.
According to a federal indictment filed Feb. 5 with the U.S. District Court in South Dakota, Erickson was active from 1996 to August 2018 in devising schemes to fraudulently obtain money.
The court papers state that Erickson, who resides in Sioux Falls, operated several businesses in recent years, including Compass Care, Inc., Investing With Dignity, LLC, and an unnamed venture to develop land in the Bakken oil fields in North Dakota. A grand jury has found that Erickson used these businesses to defraud investors.
He told investors in Compass Care, Inc., for example, that returns on their investment in the company would be repaid within a year. Erickson promised to personally repay investors the original amount they had paid if the returns failed to materialize. He made several other claims about the company that weren’t true.
A grand jury found that Erickson’s business “Investing With Dignity, LLC” was also used to defraud investors. Erickson claimed the company was in the business of developing a wheelchair that allowed people to go to the bathroom without being lifted out of the wheelchair.
He told investors in this company that they would double or triple their original investment in six months to a year.
Erickson also claimed, according to court documents, that he controlled a venture involved with purchasing land in the Bakken oil field areas of North Dakota for the purpose of building single-family residences. He began soliciting potential investors in 2013, frequently telling them falsely that the homes were being built.
The indictment indicates that Erickson conducted wire fraud through interstate wire banking communications involving two Sioux Falls banks and the Federal Reserve Bank in Minneapolis, Minnesota.
The indictment lists over 20 examples from April 1999 to May 2017, in which Erickson deposited over $1.2 million to the accounts of his three fraudulent businesses or to his personal account with Wells Fargo Bank.
From October of 2014 through March of 2017, Erickson also made money laundering payments to several individuals which involved the proceeds of his unlawful wire fraud.
According to a news release from the U.S. Attorney’s Office, the maximum penalty upon conviction is up to 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 up to $1,100 to the Federal Crime Victims Fund. Restitution may also be ordered.
The charges are merely accusations and Erickson is presumed innocent until and unless proven guilty.
The investigation is being conducted by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation. Assistant U.S. Attorney Jeffrey C. Clapper is prosecuting the case.
Erickson was released on bond. A trial date has not been set.
Erickson grew up in Vermillion and has had a Sioux Falls apartment in recent years. He is a 1979 graduate of Vermillion High School who holds a bachelor’s degree from Yale and a law degree from the University of Virginia.
His colorful life prior to his involvement with Butina included working as a top staffer in Pat Buchanan’s 1992 presidential campaign, and serving as an entertainment agent for John Wayne Bobbitt after Bobbitt’s penis was infamously severed in 1993.
Erickson, 57, and Butina, 30, reportedly met several years ago while she was operating a gun-rights group in Russia and was cultivating connections with American gun-rights activists.
Butina’s activities brought her South Dakota several times. She gave a lecture on the University of South Dakota campus in Vermillion in the spring of 2015. Her address at the university was entitled “The Right To Bear Arms In Russia … Where Neither Currently Exists.”
Butina’s appearance was sponsored by the university’s W.O. Farber Center, The Criminal Justice Club and The Political Science League.
Also, Butina has reportedly been in Yankton several times, as recently as last June.
In 2016, Erickson and Butina co-founded a South Dakota-based company named Bridges LLC, according to a February report in the Rapid City Journal. The incorporation papers say nothing about the company’s purpose.
Butina spent nearly half of 2018 in federal custody.
She took a plea deal and pleaded guilty Dec. 13, 2018 in Washington, D.C. She acknowledged conspiring with a Russian official and someone else described as “U.S. Person 1” to infiltrate and influence American political groups on behalf of Russia, without required registration as a foreign agent.
“U.S. Person 1” is widely believed to be Erickson.