BELCOURT, N.D. — When Hunter Hanson last fall filed for a license to start a used car business at the Turtle Mountain Band of Chippewa, Stuart Medrud was by his side.
But Medrud, 54, is adamant he was an employee-manager of the then-21-year-old Hanson — never a true partner or owner in Hanson Motors — and that he didn’t know the money for the business came from ill-gotten grain.
The used venture is one place Hanson — North Dakota’s notorious grain marketer — found to pour away money some of the $11.2 million he should have paid to 60 farmers and elevators owed money by his Midwest Grain Trading and Nodak Grain businesses.
Hanson was arrested and in jail from April 4. On July 30, he pleaded guilty federal money laundering and wire fraud charges and is to be sentenced Nov. 12. Separately, he faces a court date Sept. 26 in Mountrail County over a $94,000 non-sufficient funds check to United Quality Grain.
Medrud is still taking checks from customers who still owe money on cars. Of those, 35 or so have stopped paying because no one — Medrud or any government entity — can assure them they’ll get a clear title. Medrud estimates car buyers may still owe roughly $200,000 to the defunct dealership.
“I’m afraid (officials) are going to come and start taking cars from people, instead of giving them the titles,” Medrud says.
A ‘lot of vehicles’
Medrud was finance manager at M.J. McGuire’s, a Ford dealership in Rugby, N.D., when he first met Hanson in about January 2018.
Hanson, at age 20, came in and wrote out a check for $30,000 check to buy a car. Hanson explained to Medrud that his Midwest Grain Trading business, a roving grain buying company, was “doing very well.”
An auto salesman indicated Hanson had “money from his grandparents and (he) had invested it very well,” Medrud recalls.
Hanson would go on to buy “a lot of vehicles” at McGuire’s in 2018, including a “Raptor,” the top-of-the-line Ford F-150, for perhaps $70,000.
At one point, Medrud told Hanson he was going into business for himself, perhaps starting a used car business at his home at Belcourt so he would eliminate a 40-mile drive to work.
Surprise: Hanson said he, too, was setting up a car business at Leeds, N.D.
Medrud said Hanson told him “‘You should come to work for me!’”
$500K? No worries
Medrud instead urged Hanson to come look at a rental building at Belcourt. Hanson would pay the rent for the building just east of the Skydancer Casino. Medrud would manage the Hanson Motors half of the building. Medrud later would rent the other half when he got a separate auto car parts store going.
“I said ‘Do you have the money?’” Medrud remember asking Hanson at the start. “You’re going to need at least a half-million to make this run right if you want a nice dealership.’ He said, ‘Don’t worry about the money.’” Medrud says Hanson showed him a bank account on his smartphone that held more than $700,000, but Medrud later estimated he’d spent much less — as little as $200,000 — on the car business.
Medrud says he coached Hanson to buy vehicles for $5,000 to $10,000 wholesale, to match the Belcourt used retail market. Hanson went on trips to car auctions in Phoenix or Las Vegas, an area “smothered” with low-mileage rental fleet cars — without the rust from northern states. After Hanson made purchases, five or 10 cars a week, the auction would email Medrud, who would send payment from a Hanson Motors account in a local area bank.
Making the news
The car biz seemed to go well until Hanson’s grain failures started making the news.
Public Service Commission regulators started hearing complaints Nov. 9, initially suspecting non-payment of $2 million from Hanson’s businesses. When Hanson was on the cover of Agweek in Dec. 3, the area banks pulled out from financing car deals. “He had us believing he was not guilty, it was all going to pass,” Medrud says. But the bad court news and criminal charges kept coming.
Hanson began buying cheaper vehicles locally, but sometimes selling them at a loss, much like his grain dealings.
When the Hanson Motors checking account dipped dangerously low, Hanson would go and sell a car or pickup to generate cash.
“It was his money, his business,” Medrud says. “All I could do was advise him, as the old guy. ‘That isn’t smart business,’ But it didn’t seem to matter to him. If he needed 20 grand today to buy a Bobcat attachment, he’d go sell a vehicle he had somewhere and get his 20 grand. Didn’t care what he lost on it, whatever.”
The auto auctions in early August suspended Medrud’s dealer purchase privileges because of his association with Hanson, even though he wasn’t an owner. One auto auction thinks Medrud is somehow responsible for $73,000 that Hanson owes them.
“I’m not Hanson Motors, I was an employee,” he says, adamantly. But he also acknowledges his role: “He couldn’t have done this car business without me. He knew that; I knew that.”