Tarnished Metals Dealer Makes Comeback -- Auburn Man Says Kent Police, City `Ruined My Life'

AUBURN - Ross Hansen - convicted tax cheat, suspected drug-money launderer and confirmed government hater - is back in town after nearly three years in federal prison.

The flamboyant precious-metals dealer is hardly laying low.

He has sued the city of Kent for $2.5 million, saying its police officers violated his constitutional rights and drove him out of business five years ago as they chased one of the largest drug busts in King County history.

He allegedly has threatened the Kent Police officer who arrested him at the time, as well as an angry customer who claims Hansen bilked him of $21,000. Hansen says he has done nothing of the kind.

And in typical bravado, despite his business bankruptcy and what he says are more than $200,000 in legal fees, Hansen, 34, last fall restarted his mint in Auburn, which makes decorative coins and medallions.

"It's been a catastrophe, and my reputation is trashed," Hansen said. "But I decided to just come right back into the lion's den.

"Some people here think I'm a dope peddler or a pothead or worse," he said. "But when I was sitting around in prison, I decided I wanted to come back here, build this business and be a contributing member of the community."

It may be hard for some longtime residents to imagine Ross Hansen contributing to anything but controversy.

He dazzled friends and relatives by starting Auburn Precious Metals in 1981 at age 20, building it and the Northwest Territorial Mint into a silver- and gold-coin operation with $2 million a year in sales and 30 employees by 1988.

But the businessman also had a penchant for defying the law, angering some of his customers and openly fighting with the government.

In 1985 Hansen sued Auburn over the city's plan to tax his business and others to build a parking lot he said his customers wouldn't use. He lost.

Two years later, Hansen was arrested by an agent from the federal Bureau of Alcohol, Tobacco and Firearms when he tried to sell two machine guns. He served no jail time but, as a felon, was banned from owning weapons.

Then, in June 1989, Kent Police pulled off the largest drug bust ever in South King County, shutting down a Kent marijuana-growing operation and seizing more than a ton of the drug, valued at $5.4 million, as well as $600,000 in silver, gold and palladium.

The financial trail led to Auburn and Ross Hansen. He had sold the drug dealer, Ray Hendrickson, almost all of the precious metals. Kent Police suspected Hansen had knowingly laundered up to $1 million in drug money for Hendrickson by taking large cash payments and structuring them into smaller bank deposits. A dozen officers toting shotguns stormed Hansen's downtown office.

They jailed Hansen for five days. They seized his sales shop, his mint, many of his personal belongings, some guns, several cars and two homes. They took the contents of safe-deposit boxes belonging to nearly 300 customers. They occupied Hansen's businesses for weeks as they sifted through his records and tried to sell off his houses.

But the case never led to charges against Hansen.

Police say they got hung up on a technicality.

In 1989 a new state law was passed that expanded police authority to search drug-related businesses. When police searched Hansen's business, they say, they found evidence that Hansen was profiting from drug money. But they couldn't show Hansen had violated the law during the few months it had been in effect.

"We could only show that he had broken the law in the past, before 1989," said Capt. Chuck Miller, the Kent officer who arrested Hansen.

A judge ruled the new law couldn't be applied retroactively and threw out Kent's case.

Court files show that employees at Auburn Precious Metals said Hansen referred to Hendrickson as "my pot farmer." Further, the drug dealer used to come into the silver and gold shop carrying cash in a paper bag that smelled pungent, like marijuana, employees said in court papers.

Still, even though a judge initially had given Kent Police permission to raid the businesses, two judges later that year ruled the city could not justify the raid and ordered all of Hansen's property returned.

Former Kent city administrator Ed Chow acknowledged in an internal memo that Kent Police had bungled the raid, court records show.

Hansen didn't emerge unscathed. The following year, the federal government used financial records obtained in the raid to charge him with avoiding federal tax-reporting requirements. He also illegally had a gun.

Hansen pleaded guilty to the charges and was sent to federal prison for nearly three years.

But he insists he was not guilty and pleaded guilty only because "the IRS had a gun to my head." Now that he's back, he says he has a score to settle with the city.

"I was denied my personal property, they put my businesses in bankruptcy, and they didn't have a single piece of evidence I was involved in any drug operation," Hansen said. "They ruined me. Even my wife left me over this."

Hansen's $2.5 million suit against the city was denied in King County Superior Court last fall, when a judge essentially ruled that Kent may have wrongly seized the businesses but that the city had been granted a legitimate warrant to do so. The case is expected to be heard in the Court of Appeals this spring. Written arguments were due to be filed this week.

Hansen and his attorneys say the case shows what they call the illegal lengths police sometimes go to in searching suspected drug operations and seizing assets.

"Look, they can rant and rave all they want about how Mr. Hansen is not a good person, but it doesn't change the fact they seized his property without due process of the law," said Tom Ferguson, Hansen's attorney. "They violated the Constitution. It's that serious."

In the meantime, a verbal war is escalating between Hansen and the city. Last month, he showed up at a City Council meeting demanding the city return some personal items seized five years ago, including coins, a pilot's log and a passport. The city has refused, arguing Hansen's creditors own the items now.

Although city officials say they are not monitoring Hansen since his return, they are worried about threats they allege he has made.

"Apparently he has a fantasy to kidnap me, take me out in the woods, chain me to a tree, torture me and leave me to die," said Miller.

"He also has a plan to fly over City Hall in a helicopter and drop homemade bombs."

Details of the alleged threats were reported by Hansen's ex-wife in sworn testimony taken as part of Hansen's lawsuit against the city.

Miller said Hansen has threatened him directly, telling him "I'd better watch out, he'll get even with me."

A former customer of Auburn Precious Metals, Orville Mallot, said Hansen has threatened to "maim me, put me in the hospital." Mallot and two other customers who claim Hansen bilked them of thousands of dollars have sued to try to recover their money.

"That guy is a fast talker and a complete fraud," said Margaret Sched, an Auburn woman who paid Hansen $20,100 in 1989 but has never received the silver and palladium she thought she was buying.

None of this talk seems to faze Ross Hansen. He's back and here to stay, he said, buoyed by people who believe in him. One financier, local businessman Dave Anderson, has lent Hansen more than $70,000 to restart the mint.

Hansen is on probation from federal prison and argues if he really had threatened to kill anyone, he'd be back in prison immediately.

"The city is trying to smear me," Hansen said. "They'll do anything to discredit me because they've made such fools of themselves in my case."

One King County judge agreed that Kent officials have gone too far in their attacks on Hansen. Last year Judge Carol Schapira ordered the city and its lawyers to stop calling Hansen's probation officer and the federal Bureau of Prisons.

Hansen said the city was spreading rumors about him, trying to get him sent back to prison, while the city's lawyers said they were simply advising the government of Hansen's alleged threats.

In the meantime, Hansen suggests his critics use a little something he admits lacking at times: perspective.

"Look what I was convicted of. I didn't rape any children. I didn't sell any drugs. I didn't beat anybody up.

"They charged me with failure to file currency-transaction reports. You ask most people what that means and they don't even know.

"The bottom line is that the city of Kent put me out of business and ruined my life. If anybody has been wronged around here, it's me."