Evidence mounts against Hanson in grain trading insolvency

Editor's Note: This is a compilation of two articles written by Mikkel Pates and published in Agweek. The first, "24 entities file $5.2M in claims against North Dakota grain trader Hunter Hanson," was published on March 4, 2019. The second, "Farm wins judgment against ND grain trader," was published on March 7. Published with permission from Forum Communications Company.

A judge has ruled against Hunter Hanson in one of the cases filed against the grain trader who was shut down by the state of North Dakota last year.

Hanson, 21, said he'd handled some $23 million in transactions in just a couple of years doing business as Midwest Grain Trading and NoDak Grain, both based in Devils Lake, N.D. But when financial problems mounted last year, it prompted the North Dakota Public Service Commission to shut down his businesses and drove some of those he owed money to file civil suits against him.

E Y Inc. - a Jud, N.D., farm and ranch, whose agent is Emmy Huber - on Feb. 28, received a $64,888.68 judgment against Hanson in Northeast District Court in Benson County. The judgment comes with a standard 8.5 percent interest. The farm was represented by Nathan Gibbens of Cando, N.D.

Hanson's trading practices also launched a criminal case. A North Central District judge in Stanley, N.D., on April 4 will hold a pre-trial conference on Hanson's felony charges for writing checks with non-sufficient funds.

In a preliminary hearing on Feb. 7, the judge found sufficient evidence that a crime was committed and that Hanson had committed it. Hanson pleaded not guilty to a charge related to writing a $94,480.41 check to United Quality Cooperative based in Mountrail County. Hanson's attorney in the case is Lucas Wynn of Fargo.

Other pending civil cases include:

 • United Quality Cooperative also has a civil case in North Central District Court in Mountrail County filed Jan 17. The suit claims Hanson failed to pay $347,939.75 after receiving possession of durum and yellow peas. The company is being represented by Zachary Boettner in Grand Forks, N.D.

 • Dillon Dione, Rolette, N.D., served a civil case against Hanson in Northeast District Court in Benson County. Dione's lawyer is J. Bruce Gibbens, of Cando, who declined to discuss the case. Amounts sought in the case were not immediately available.

There also are so far more than $5 million in claims filed with the PSC against Hanson's businesses. The PSC has been appointed trustee in his insolvency.

The PSC has not yet "validated" the farmer and elevator claims, but Crockford says that process is underway. In the meantime, the agency is liquidating grain assets from Hanson's facilities at Rohrville, N.D., and Tunbridge, N.D.

In past insolvencies, some claims have been deemed invalid if grain wasn't delivered, but the agency is looking at each one individually. "If a claim is deemed invalid for our proceeding isn't to say they don't have a legitimate breach of contract," he said. They may have other legal recourse.

The claims, from largest to smallest, so far are:

 • Renville Elevator, Tolley, N.D.-$1,449,059. (Owned by ItalGrani USA) Claim includes $911,448 in unpaid scale tickets, plus $737,000 "outstanding contracts"-claiming a difference between the $6.70 per bushel contracted amount minus a $4.70 value as of mid-November. East Central's commission, 2 cents to 10 cent per bushel.

 • McLean Elevator Co., Benedict, N.D.-$763,041. (Owned by ItalGrani USA) This includes $638,410 in unpaid hard red spring wheat delivered August to November 2018. The total includes $124,631 in market differences for grain contracted but not delivered. East Central's commission, 2 cents to 10 cents per bushel.

 • Delmar Commodities Ltd., Winkler, Manitoba-$598,079. East Central's commission, 8 cents to 10 cents per bushel.

 • Powers Lake Elevator Co., Powers Lake, N.D.-$527,933. (owned by ItalGrani USA)-Claim includes $430,418 of unpaid scale tickets, plus a $97,514 market difference on undelivered commodities. East Central's commision, 2 cents to 10 cents per bushel.

 • United Quality Cooperative, New Town, N.D.-$347,939. East Central's commission, 5 cents per bushel. Kim Meyer, controller, writes to the PSC on Nov. 29, 2018: "Should I file a formal complaint against East Central Grain, as they wrote the trade agreements we have with Green Leaf Commodities and Midwest Grain Trading. We most likely would have never even heard of either of these companies if East Central Grain hadn't brokered them to us?"

 • Lynden Skaare, Alamo, N.D.-$199,818. East Central's commission, 5-10 cents per bushel. In July, Skaare writes in the claim that he "called the PSC to check if both elevators were License and Bonded. They said YES."

 • Shafer Commodities, Morden, Manitoba --$167,418. Yellow peas delivered Sept. 13, 2018, to Oct. 30, 2018. East Central's commission, 10 cents per bushel. On Oct. 25, Hanson explains he didn't have the right bank account number. On Oct. 30, Shafer requests a check sent "by COURIER (not mail) courier" and they would pay the charges. On Nov. 8, Jan Leishman of Shafer appeals to East Central's Stommes: "Dan-could you please ensure that Hunter sends these funds promptly.")

 • Dakota AgSynergy LLC, Linton, N.D.-$164,735. East Central's commission, 3 cents and 5 cents per bushel.

 • Derek Morey, Minot, N.D.-$145,889. Grain hauled in early September at Hensler and Osnabrock, and received a check on Nov. 2, 2018. Checks returned for "stop payment."

 • Woodworth (N.D.) Farmers Grain Co.-$133,579, for spring wheat shipped in August and September, with possible protein adjustment.

 • Roger Harstad, Palermo, N.D., farmer, $111,888. East Central's commission unspecified.

 • Todd Timm, Kensal, N.D.-$70,734. Plus $1,500 commission already paid to East Central.

 • E Y Inc., Jud, N.D.- $58,300. 10,000 bushels of milling hard red spring wheat, hauled to Osnabrock Farmers Co-op. by A&T trucking, from Sept. 22, 2018, to Nov. 5. 2018. East Central's commission unspecified.

 • K&S Operating Partnership, Stanley, N.D.-$56,776. In wheat, from Stanley, N.D., to Hensler ADM-Benson Quinn, on Sept. 18, 2018, and on Sept. 16 and Sept. 19 to Nekoma, N.D. Kevin Harstad, farmer. East Central's commission, 5 cents per bushel.

 • Kent Florhaug, Kensal, N.D.-$53,869, for spring wheat. East Central's commission, 4 cents per bushel. Grain went to the Osnabrock Farmers Co-op Elevator, Inc., Nekoma, N.D.

 • Dale and Brandyn Garksop, Flaxton, N.D.-$53,461. Aug. 1 to Sept. 30, yellow peas to Dakota Dry Bean, Crary, N.D. East Central's commission, 10 cents per bushel.

 • Southland Pulse, Estevan, Saskatchewan-$41,363. For 15,000 bushels yellow peas, Sept. 5, 2018. East Central's commission, 15 cents per bushel.

 Southland had been approached by Stommes in April 2018 to sell 15,000 bushels of peas to Midwest Grain Trading. Southland Pulse wanted an extra 20 cents to deliver to Rohrville, farther than Tunbridge. "How confident are you I will get paid?" asks Shawn Madsen, in an email Sept. 12. "Payments have been as agreed," Stommes replies.

 • Garrett Novak, St. Hilaire, Minn.- $34,977. For peas. East Central's commission, 5 cents per bushel. Sold to Crookston Bean Inc., 1600 S. Main St., Crookston, Minn., to Garrett Novak on Oct. 3 and 4.

 • Berthold (N.D.) Farmers Elevator-$28,540 plus a contract dispute. East Central's commission, 10 cents per bushel, through Zach Herschman.

 • Bridge Agri Partners, Inc., Lethbridge, Alberta-$33,049. "Broker Contract#:TBA: EASTC (referring to East Central Grain Marketing)

 • Devin Tuomala, Perth, N.D.-$21,559. Hard red spring wheat went to Nekoma, N.D., from Oct. 22 to Oct. 23. On Jan. 14, he said he was withdrawing his claim because Hanson had paid him in early December with a check with a 10-day hold "due to there not being any information in the top left corner of the check." He said the check cleared in late December and he had received the money due in full.

 • Andrew Skaare, Alamo, N.D.- $108,849. East Central's commission unspecified.

 • Austin Steinmetz, Carson, N.D.-$32,000, estimated. East Central's commission unspecified.

 • Ryan Greenfield, Powers Lake, N.D.-$20,000 estimated. East Central's commission, 5 cents per bushel.

 • Kris Mortenson, Souris, N.D.-$18,450. Durum sales.

Hanson also owes money to the company that rented him an apartment in West Fargo.

Hanson, 21, formerly of Leeds, N.D., had claimed in some legal documents he had a West Fargo, N.D., address.

 East Central District Judicial Referee Susan Solheim presided over a March 1 hearing in Fargo in which she allowed EagleRidge Property Management LLC of Fargo to evict Hanson from an apartment in West Fargo.

Property manager Rachel Olson testified that Hanson had failed to pay either his February or March rent at $1,425 a month. Solheim approved a judgment against Hanson of $3,618.50, including legal fees for EagleRidge.