Auburn fraudsters who fled town to avoid court sentenced to prison, fined more than $60M

A couple convicted of wire and mail fraud who fled town to avoid their sentencing hearings now face five and 11 years in prison, respectively.

The Seattle U.S. District Court on Monday sentenced Bernard Ross Hansen to 11 years and Diane Renee Erdmann to five years, announced U.S. Attorney Nick Brown. The two were convicted in July 2021 and were originally slated to be sentenced April 29, but fled their home in Auburn and left town.

They were arrested in Port Townsend on May 10, following an 11-day manhunt. They had bought a new vehicle and three loaded guns.

The two were found guilty of defrauding thousands of customers of more than $30 million through Hansen's bankrupt company, Northwest Territorial Mint (NWTM). According to court docs, NWTM was in the business of manufacturing medallions and awards, as well as buying, selling, exchanging, storing and leasing precious metals like gold and silver.

"Mr. Hansen and Ms. Erdmann defrauded more than 3,000 people of some $30 million – money that represents the victims’ plans and dreams: retirement, college funds, and inheritances," said U.S. Attorney Nick Brown. "It is heartbreaking to hear how the fraud upended their lives and left them working longer, harder, and in deep stress to try to recover. The impact of this fraud goes beyond the significant dollar figure."

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Hansen and Erdmann lied to NWTM customers about shipping times for gold and silver, and in fact lacked the assets to fulfill customer orders. Court docs said they instead used the money of newer customers to pay off the orders of older customers—a Ponzi-like scheme that cost customers more than $25 million. The couple then delivered fake storage account statements to their customers in return, and in some cases even melted down customers' precious metals to fulfill other orders.

NWTM filed for bankruptcy on April 1, 2016. Later that month, their vaults were inventoried, where it was found that stored bullion for more than 50 customers was missing. The attorney's office said the missing gold and silver was worth more than $4.9 million.

"Company president Hansen apparently did not learn his lesson from his last trip to prison," said FBI Seattle's Special Agent in Charge, Donald M. Voiret. "Together, Hansen and his co-conspirator Ms. Erdmann stole decades of savings and financial security from thousands of victims who thought they were making safe investments for themselves and their loved ones."

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Given Hansen and Erdmann's attempt to avoid sentencing by fleeing town, prosecutors increased their sentencing recommendations.

Hansen is ordered to pay $33.7 million in restitution, and Erdmann must pay $32.1 million.