Investment Fraudster Sentenced

Adviser who claimed to invest in fracking defrauded unsuspecting family

When a Montana woman needed legal and financial help selling a family farm, she was introduced through a friend to Michael Van Auken.

He did good work for her and began offering his financial expertise to the rest of her family, having seemingly earned her trust. Van Auken claimed to be both a lawyer and accountant who could help them invest. He even convinced the Montana woman’s parents to invest their entire retirement account with him.

But in reality, Van Auken was neither an accountant nor a lawyer. He simply stole more than $700,000 from the family between 2011 and 2015.

“He was a good talker and convinced them that he could manage it better and make more money for them,” said Special Agent Sara Sampson, who investigated this case out of the FBI’s resident agency in Helena, Montana, which is part of the Salt Lake City Field Office.

Van Auken told the family he planned to invent a new drill bit that would be lucrative for the oil fracking industry and said he’d invest some of their funds in it.

Instead, he spent most of the family’s money in foreign currency exchange trading, an extremely risky activity sometimes compared to gambling. He also spent some of the funds on his personal living expenses.

“He was essentially throwing this family’s money away, and they gave him more and more over time,” Sampson said.

Van Auken created a lengthy paper trail to back up his lies. He told the family their investments were profitable.

But warning signs did start to show. The Montana woman noticed a change in Van Auken’s behavior, and he admitted lying to her about some of the investments.

The victim did not know where to turn until a friend encouraged her to contact the FBI.

“The victim in this case was very brave,” Sampson said. “She made a mistake in getting Van Auken involved in her family’s lives, but she contacted us and saw the case through to the end.”

Investigators began digging into the financials and learned that where the actual money went was not consistent with what the documents said.

The family collectively lost more than $700,000. Much of that was the woman’s parents’ retirement accounts, and some of the funds belonged to the original victim herself and her young adult children.

The impact was devastating. While the younger victims will have time to recover financially, the woman’s parents are now deceased, and they lost their entire retirement savings. They’d hoped to pass those funds on to their children and grandchildren.

Additionally, Van Auken claimed to be paying taxes on the family’s funds, but he never did. So the surviving relatives are also dealing with tax debt, Sampson said.

Van Auken pleaded guilty in January 2020 to wire fraud, money laundering, and filing a false tax return. In May 2020, he was sentenced to 28 months in prison.

“This wasn’t just a small town thing that’s going to be swept under the rug. He committed a crime, and we wanted to bring it to light and make sure it couldn’t happen to anyone else.”

Sara Sampson, special agent, FBI Salt Lake City

Sampson hopes the conviction will prevent him from victimizing others.

“The victims would say they weren’t trying to get rich. They were just trying to make good decisions, and they trusted someone who they thought would make good decisions,” she said.

The investigative team, which included FBI agents and forensic accountants as well as partners from the Internal Revenue Service, wanted to get justice for the family.

“This wasn’t just a small town thing that’s going to be swept under the rug,” Sampson said. “He committed a crime, and we wanted to bring it to light and make sure it couldn’t happen to anyone else.”

While anyone investing should do careful research, Sampson pointed out that the victim in this case had done research and was still swindled. The key is to listen to your gut instincts and ask lots of questions.

“The story of this case is that you can be careful, and it can still happen to you,” she said. “If it does, don’t be embarrassed—report it to law enforcement. It can happen to anyone, and it happens to a lot of people. If we can prevent the person from hurting someone else, we’ll do our best to do that.”