FORMER BROKER CHARGED WITH THEFT AND SECURITIES FRAUD

Bismarck, ND - Robert H. Medhus, a former securities broker, has been criminally charged with securities fraud, the sale of unregistered securities, and theft of property. The charges were filed March 7 by Cass County State's Attorney, Birch Burdick, and resulted from an investigation by the North Dakota Securities Department into an investment scheme run by Medhus for over 10 years in which he defrauded 18 victims of over $900,000.00.

In January of 2012, Securities Commissioner Karen Tyler revoked the registration of Associated Financial Services Inc., the broker-dealer owned by Medhus, thereby also revoking his securities agent registration. Based on investor complaints, in June of 2012 The North Dakota Securities Department and Bureau of Criminal Investigation executed a search of Medhus's home and office in Fargo and West Fargo. Medhus was ordered to cease and desist from further violations of the North Dakota Securities Act or rules in connection with the offer and/or sale of securities in this state. The Commissioner alleged that Medhus directly and indirectly employed devices, schemes and artifices to defraud a North Dakota investor.

The Department's investigation uncovered a complex Ponzi-like scheme in which Medhus allegedly forged client checks, created fake investment account statements, and failed to invest client assets as agreed, in order to divert his clients' money to his own accounts for his personal and business expenses.

On March 7, 2013, the Cass County State's Attorney's Office filed an Amended Information against Medhus with 16 criminal counts. Those counts are comprised of 2 counts of theft of property, 13 counts of fraudulent practices in the sale of and with respect to securities and 1 count of offering for sale or selling unregistered securities. All 16 counts are Class B felonies, punishable by up to 10 years imprisonment, a $10,000.00 fine, or both. Pursuant to the North Dakota Rules of Professional Conduct, the Comment to Rule 3.6 regarding Trial Publicity, State's Attorney Burdick notes that a criminal charge is merely an accusation and a defendant is presumed innocent until and unless proven guilty.