Emily Welker, Published March 17 2013
Two alleged victims of West Fargo broker speak outFARGO – In the grand scheme of things, losing an entire retirement nest egg might not be as bad as losing one’s husband.
But when the former is linked to the latter, as it was for one of the alleged victims of a West Fargo investment broker accused of defrauding 18 clients out of more than $900,000, the worry, shame and betrayal of trust are greater than the sum of its parts.
“It’s just so embarrassing – my family doesn’t even know,” said a woman identified in court records as Victim No. 2, who doesn’t want to be identified because her family is still unaware of what happened.
The 65-year-old woman is splitting her time between two part-time jobs these days. Back when allegations first surfaced against Robert Medhus, the broker, she thought she was set to retire. Now she wonders how to make ends meet between her two jobs and what she gets in Social Security.
Asked how she is doing, her voice trembles a little. “Not well,” she said. “I’m doing the best I can…. It was just everything I had.”
Court documents allege hers is a fairly typical case in the long list of allegations against Medhus, who lost his North Dakota securities license in June 2012.
Medhus, 65, was originally charged in Cass County District Court with two counts of felony theft, back in January of this year, for allegedly bilking a married couple out of more $250,000.
Last week, the list of charges against him grew to include 16 felonies, including 14 counts of securities fraud and one count of selling unregistered securities – all Class B felonies that carry a potential 10-year prison sentence on conviction.
Victim No. 2 said her husband had just died when Medhus, her broker, sat down to talk with her.
“He said, ‘I’ll help you; I’ll take care of you. Don’t worry about it,’ ” she said, though she remembers little else about the conversation beyond being distraught and confused without her husband by her side. Her husband had done business with Medhus while he was alive.
That was in 2002, court documents say, when she started writing checks for Medhus to invest – $55,000 in October 2002, another $45,000 in April 2003, then $50,000 in July 2003.
She said Medhus told her all the money was going to securities. From July 2004 to July 2011, Medhus allegedly gave her eight different account statements, written on his company’s letterhead, showing that her money was in a Reliance fund and had grown in value to more than $216,000.
Then she saw a report about the initial charges against Medhus.
“I saw it in the paper about a month before I retired, and that’s how I figured it out. He’s that good,” she said.
Prosecutors allege in court records that Medhus had taken all her money and, instead of investing it, used it for himself.
At least one of the alleged victims listed in the complaint didn’t lose their investment.
“I don’t know why I’m the lucky one,” said Mark Nokken, of Moorhead.
Nokken said that he got involved with Medhus on the advice of a friend, who, he said, “gave me a chance at investing” with a company called Pines on 37th in June 2011.
Nokken said the $200,000 he gave Medhus to invest was right where it was supposed to be, in a share of Pines on 37th, and that he didn’t consider himself a victim.
He doesn’t know whether his friend was as lucky.
“I guess I don’t know whether he got hurt in the tail end of this thing or not,” Nokken said. “I must have been eight seconds ahead of a bomb exploding.”
State securities investigator Rachel Rice said while Nokken may not consider himself a victim, Medhus is accused of not doing what he claimed he was doing with Nokken’s investment.
“He used the funds for himself for four months, and then made the investment,” said Rice, adding that Medhus made interest payments out of his own account to Nokken and his wife out of Medhus’ own account.
Bank records don’t show where the funds for those payments, or for the $200,000 Medhus did invest in Pines on 37th on the Nokkens’ behalf, came from, Rice said.
“It’s been months and months and months” sorting through all of Medhus’ records to get this much information, she said.
Medhus and his attorney could not be reached for comment, and his next court appearance is set for April 11.
Victim No. 2, in the meantime, is preparing to testify against him.
So far, she says, only her lawyer knows the extent of her financial troubles.
“You can hear even now, I’m having a hard time with it,” she said. “I’m just waiting for him to go to jail.”
Readers can reach Forum reporter Emily Welker at (701) 241-5541