SEATTLE — The Auburn couple that defrauded thousands of people of more than $30 million and then fled to a motel in Port Hadlock has been sentenced to prison.
Bernard Hansen got 11 years and Diane Erdman got 5 years. A judge also ordered them each to pay more than $30 million in restitution.
Pair who went on the run after being found guilty of fraud at a now-bankrupt precious metals firm. Mr. Hansen was the CEO of Northwest Territorial Mint and Erdman was his second in command and Vault Manager. Together they opened a bullion business that involved the selling, buying, storing, and leasing of gold and other precious metals.
But Hansen and Erdmann defrauded their customers when they used customer money to pay their own personal expenses to the point where the company lacked enough assets to fulfill customer orders. So they used new customer money to pay off older customers in a Ponzi-like scheme. Over 2500 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded. The total loss to these customers was more than $25 million.
Prosecutors increased their sentencing recommendations for Hansen and Erdmann to reflect the 11-day manhunt that followed their failure to appear. When arrested in Port Hadlock on the Olympic Peninsula last month, they had three loaded firearms in a box behind the drivers’ seat of their car.