NorthwestMarch 17, 1993

Associated Press

BOISE Former Idaho Congressman George Hansen was sentenced to four years in prison for bank fraud Tuesday after taking responsibility for a

multimillion-dollar check-kiting scheme.

Hansen, 62, who served 12 months in prison in the 1980s, also was ordered to

serve three years of supervised probation after his release from federal prison, and to pay a $12,500 fine.

Federal prosecutors had asked U.S. District Judge Edward Lodge to imprison Hansen for nine years for his December conviction on 45 counts of federal bank fraud.

But while Lodge initially considered sentencing the former seven-term Republican congressman to up six years, he cut that to four after listening to some of the investors who still supported Hansen despite losing money in his discredited financial scheme.

''I've never seen people who are owed hundreds of thousands of dollars, who don't know how much they are owed, who are willing to eat those losses,'' Lodge said. ''I've never seen that kind of blind allegiance.''

Later Tuesday afternoon, Hansen associate John Scoresby, 45, was sentenced to 21 months behind bars, a $6,000 fine and three years supervised probation. He was convicted on the same 45 counts.

He called the check-kiting an ''unfortunate set of circumstances that caught a lot of people, including John Scoresby, by surprise.''

Lodge agreed with the jury that anyone with Scoresby's business experience could not have been unaware of how the scheme was being operated.

The maximum penalty for each count is 30 years in prison and $1 million in fines. Hansen was sentenced to four years on each of the 45 counts, but Lodge ordered the prison terms to run concurrently, as were Scoresby's.

Daily headlines, straight to your inboxRead it online first and stay up-to-date, delivered daily at 7 AM

Hansen said he might appeal, although he does not have the money to mount a legal challenge.

The judge scolded Hansen at Tuesday's hearing for trying to justify his crimes by maintaining that the government was out to get him.

''You recently were a man on a mission where the end justified the means,'' the judge told Hansen. ''You had blinders on, and had developed a certain paranoia.''

Hansen was a flamboyant congressman from Idaho's 2nd Congressional District until being defeated by 170 votes in his bid for an eighth term in 1984. He had been convicted five months before of submitting false financial disclosure reports to Congress, and later served a year in a federal minimum-security prison.

Hansen told Lodge on Tuesday that had the federal government and the Idaho Department of Finance not shut down his operation two years ago, he would have been able to repay his investors the more than $18 million he has admitted owing. ''I never felt I obstructed justice,'' said Hansen, who has built his reputation on fighting government bureaucracy and alleged abuse of taxpayers. ''I did it in good intent. I'm sorry for whoever I hurt.''

Hansen, who also filed for bankruptcy and admitted state securities law violations, told Lodge that he was involved in a number of financial deals that with time could result in enough cash to reimburse hundreds of people who lost money in his scheme.

Five of Hansen's investors testified on his behalf Tuesday, including Paul farmer Brad Neibaur. He pleaded guilty last year to playing a role in the Hansen check-kiting scheme and was sentenced to three years probation and ordered to repay the Bank of Commerce in Idaho Falls more than $100,000.

Officials said the bank was left holding more than $2 million in bad checks when the kite collapsed. Lodge did not order the two men to reimburse the bank, leaving it up to that business to pursue them.

''The losses involved are staggering,'' Assistant U.S. Attorney George Breitsameter said. ''This was a scheme that was bound to collapse because of the enormous amounts of money being pumped through the accounts and shifted around.''

But in each case, the investors who testified did not blame Hansen for their losses and agreed with him that government involvement undermined his loan scheme.

''A lot of people think that if the government hadn't intervened, George would have got his project going,'' Neibaur said, including himself in that group. ''There's an arena of combat between the forces that came into play. As a citizen, I don't know what forces they are.''

Story Tags
Daily headlines, straight to your inboxRead it online first and stay up-to-date, delivered daily at 7 AM