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Fargo broker accused of stealing $250,000 from couple

FARGO - A Fargo investment broker who received a cease-and-desist order last June for allegedly defrauding a client is now accused of bilking a married couple out of more than $250,000.

Two counts of Class B felony theft were filed against Robert Henry Medhus on Friday in Cass County District Court.

If convicted, the 65-year-old faces up to 10 years in prison and a $10,000 fine for each charge.

According to the investigative report by the state Securities Department:

In a July 2 interview, Medhus allegedly admitted that he forged checks made out to the couple in the amounts of $234,400 and $22,104, and deposited them into his account for his personal use.

The couple had been clients of his for many years and made numerous investments with him, including a $400,000 investment in a company called 32nd Center LLLP.

In November 2007, the company was able to consolidate loans and return capital to its investors, including a $234,400 check written to the couple - a check the couple said they never received.

The company's managing partner told investigators that Medhus had asked that the disbursement checks be sent to him so he could personally deliver them to his investors.

Medhus allegedly told investigators that after forging the $234,400 check and depositing it into his account, he put $150,000 of it into a "real estate thing." He also paid the couple $45,000, which he said was for money he had owed them previously. His bank records showed the couple loaned him $40,000 in 2004, the report states.

Medhus said he used the rest of the money to pay expenses, including credit card payments and an alimony payment to his ex-wife, the report states.

The other allegedly forged check, totaling $22,104, was issued in January 2011 and handled by Medhus in a similar manner, the report states.

In both cases, the couple weren't aware the checks had been distributed, it states.

Medhus could not be reached for comment. He did not have an attorney listed with the court.

Assistant State's Attorney Cherie Clark, who is prosecuting the case, was out of the office Monday.

Mike Daley, enforcement attorney with the Securities Department, said Medhus remains under investigation for several similar cases of alleged misappropriation of client funds.

"I believe there will be additional charges forthcoming," Daley said.

The department's order filed against Medhus last June followed an action taken in January 2011 to revoke the registration of his brokerage, Associated Financial Services Inc.

Medhus' registration as a securities agent also was revoked, yet he continued to represent himself as a registered agent, the department said. State investigators executed a search warrant at Medhus' home and office in June.

According to the department's statement about the cease and desist order, Medhus issued a forged 1099-R form indicating a $17,100 distribution from an investor's retirement account. He then tried to pay the distribution with a $17,100 check drawn on his business account, but there were insufficient funds to cover the check.

When the investor tried to close out accounts with Medhus, Medhus issued a $319,125 check drawn on his business account, but there were insufficient funds for that check, too, the department said.

Medhus has been unable to account for the investor's assets, it said.