PORTLAND, Ore. — A Corvallis man has been sentenced to 2.5 years in federal prison for defrauding investors in an organization he claimed would support Christian missionaries. Erik J. Hass, 53, will also have to pay more than $1.75 million in restitution to his victims.
According to the U.S. Attorney's Office for the District of Oregon, Hass formed an organization in January 2013 called Simply Grains, Inc. He claimed that the company supported Christian missionaries and organizations while offering "significant returns for investors."
Hass went about asking members of his church, coworkers and other acquaintances to invest in Simply Grains through self-directed retirement and cash accounts. He handed investors unsecured promissory notes, promising compounded annual returns of up to 30%.
Federal prosecutors said that Hass made claims that he would only profit from these investments if monthly returns were higher than 2%. But from the outset, he began drawing a salary from those invested funds and began using it to pay for his personal expenses.
For years, Hass sent investors account statements showing fake gains and account balances, as well as fake IRS 1099-INT forms. This continued well into 2018, prosecutors said, though Hass knew that he couldn't honor his claims.
Instead, the investment business became a Ponzi scheme. Hass used contributions from new investors in order to pay out earlier investors who requested withdrawals from their accounts. The U.S. Attorney's Office said that at least 20 investors lost more than $1.75 million collectively from making investments in Hass' company.
A federal grand jury handed down an eight-count indictment in June 2020, charging Hass with wire fraud, mail fraud and money laundering. He ultimately pleaded guilty to five counts of wire fraud and two counts of mail fraud in February of this year.
On Wednesday, Hass was sentenced to 30 months in federal prison, plus three years on supervised release, in addition to the $1.75 million in restitution.
