ST. PAUL - A Minnesota man is accused in federal court of stealing more than $2 million from victims hoping to invest in North Dakota oilfield housing and using the money to fund his own entertainment and lifestyle, including buying a 17-acre island.
Ronald David Johnson, 50, Corcoran, Minn., is charged with five counts of wire fraud and one count of money laundering, the U.S. Attorney's Office for the District of Minnesota announced Wednesday.
According to the indictment, Johnson solicited $2.1 million from four investors for oil worker housing projects in the Bakken that were never built.
Instead, Johnson allegedly spent the $1.8 million of the investors' money to fund his personal cattle farm, take vacations, buy vintage cars and purchase real estate, including a 17-acre island on Mink Lake near Maple Lake, Minn., according to the U.S. Attorney's Office.
Johnson is expected to appear in court Thursday before Magistrate Judge Becky R. Thorson in U.S. District Court in St. Paul.
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Court documents in a related civil case say Johnson solicited investments starting in fall of 2013 by telling victims the funds would be used to buy land in the Bakken for oil worker housing. The idea, registered as Indoor RV Parks LLC, proposed to build large warehouses to provide climate-controlled housing for workers with RVs.
One investor told law enforcement Johnson claimed to have bought land at the beginning of North Dakota's oil boom and he planned to capitalize on growth in Williston, Dickinson and New Town, court records say. The investor said that in November 2013, Johnson expected to have the projects completed within nine months.
In August 2015, one investor reported to the FBI being defrauded out of $800,000 after traveling to the sites and finding no signs of construction, court records say.
Law enforcement reviewed property records in the counties where the RV parks were supposed to be located but could not find properties owned by Johnson or his related companies, court records say.
Investors told law enforcement they received reports from Johnson that he was making strides toward the three RV parks, court records say.
Johnson told investors in an April 2015 email: "Lease signing has been moving fast as the housing shortage in both North Dakota and Montana remain at record highs," according to court documents.
The FBI and the Criminal Investigation Division of the IRS investigated the case.
The U.S. Attorney's Office also is seeking forfeiture of three parcels of property that were purchased with the proceeds of the alleged scheme.
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In court records in the forfeiture case, Johnson denied the allegations that he led an investment fraud scheme or made false misrepresentations to investors.
Attorneys listed for Johnson in court records did not respond to a request for comment late Wednesday.
North Dakota does have an indoor RV park designed for worker housing near Watford City. A spokesman for the U.S. Attorney's Office said the allegations involve housing that was never built and he's not aware of any connections between the investment scheme and any other RV park operating in North Dakota.
