This week, it was announced that 47-year-old David Hansen formerly of Idaho Falls, Idaho had been indicted by a federal grand jury on 17 counts of wire fraud and six counts of tax fraud. The announcement was made by United States Attorney Bart M. Davis on Friday November 16, 2018. Hansen was the CEO and 90% owner of Yellowstone Partners LLC. The investment management firm was based out of Idaho Falls.
The indictment claims that the firm managed its clients’ investment funds according to management agreements that provided for the firm to collect fees for its services. Actual client funds were kept in accounts at national brokerage firms. Yellowstone was able to receive fees by submitting billing requests to the brokerage firms. Those requests were supposed to comply with the fees set out in the initial management agreements between clients and Yellowstone Partners.
The indictment accuses Hansen of intentionally overbilling many of his clients’ accounts from 2008 to 2016. He has been accused of personally submitting fraudulent billing requests and directing certain employees to do the same. The indictment alleges that Hansen defrauded his clients of at least $9,448,941 through the overbilling scheme. Hansen is also accused of aiding and assisting in the preparation of false and fraudulent income taxes for the firm and himself in 2012 and 2013.
At this point in time, the defendant is innocent until proven guilty beyond a reasonable doubt in a court of law. Further details can be found here.