By Craig Clough

Law360 (July 6, 2020, 10:47 PM EDT ) A conservative operative once linked to a Russian agent who made headlines for her high-profile arrest was sentenced Monday in South Dakota federal court to seven years in prison after he pleaded guilty to wire fraud and money laundering.

Paul Erickson's sentencing was connected to fraudulent business schemes he operated and is not directly tied to the case of Maria Butina, who sought to create a back channel between the Kremlin and the U.S. government. She pleaded guilty in 2018 to one federal count of conspiracy and was deported in October.

Erickson, 58, was indicted in February 2019. He pled guilty in November to eight counts of wire fraud and money laundering and was sentenced by U.S. District Judge Karen E. Schreier.

Federal prosecutors accused Erickson of making false statements to induce his targets to invest in his businesses, including Compass Care, which purported to design, build and manage assisted living facilities. He also operated a scheme claiming to build homes near oil fields in North Dakota, prosecutors said. 

"The dramatic upward departure for Mr. Erickson's sentence speaks volumes about the crimes he committed over the vast course of time they occurred," said FBI Minneapolis Special Agent in Charge Rainer Drolshagen in a statement. "The scope, breadth, and length of his illegal actions spanning more than 20 years involving more than 150 victims was a tall order to investigate, but the effort is well worth it with the justice that was meted out today."

Among the false representations Erickson made was that Compass Care managed 27,00 nursing homes, assisted living and apartment beds in 26 states, that he would personally repay the full amount of original investment within one year if the returns failed to materialize or were delayed beyond one year, and that a "typical Compass Care facility provided a home for 61 residents and sat on four beautiful landscaped grounds," according to the indictment.

"It was part of the scheme and artifice to defraud that defendant would obtain money from the victims in exchange for the false impression that the money was being used to invest in Compass Care, when in fact the money paid by victims was not used in the manner represented to them," according to the indictment.

Another business, Investing With Dignity, purported to sell a wheelchair that allowed people using it to go to the bathroom without being lifted out of the wheelchair, when in fact investment money only enriched Erickson, according to the indictment.

For his purported oil field venture, prosecutors said that Erickson's false statements to investors included they could see up to a 90% return within months, and that his projects had or were in the process of being built.

Butina's plea deal stated that a plan was drafted in 2015 with the help of an unnamed American individual, who has been widely identified as Erickson, a GOP operative at the time. Butina claimed to have "laid the groundwork for an unofficial channel of communication with the next U.S. administration," according to the statement of facts.

Butina also admitted in the plea deal to organizing a trip for National Rifle Association members to visit Russia in 2015 and telling an associate they could "put pressure on them quietly later."

Butina's plea deal also described her involvement in bringing Russians to the 2017 National Prayer Breakfast in Washington, D.C. She told Erickson at the time that the group was "coming to establish a back channel of communication," according to the statement of facts.

Counsel for Erickson declined to comment. 

The government is represented by Jeffrey C. Clapper of the U.S. Attorney's Office for the District of South Dakota.

Erickson is represented by Clint L. Sargent of Meierhenry Sargent LLP.

The case is U.S. v. Paul Erickson, case number 4:19-cr-40015, in U.S. District Court for the District of South Dakota.

--Additional reporting Hayley Fowler. Editing by Peter Rozovsky.

For a reprint of this article, please contact reprints@law360.com.