Charles Hoefer

DUNSEITH – A federal civil rights lawsuit seeking nearly $2 billion in damages has been filed by a Dunseith RV manufacturer against five current and former North Dakota Department of Commerce officials, alleging a multi-year scheme involving deception, concealment, retaliation and abuse of state power.

According to the 242-page complaint filed in U.S. District Court in North Dakota on Thursday, Aug. 27, Charles Hoefer and the Hoefer Group, LLC, are seeking a jury trial for damages arising from the alleged deprivation of rights, conspiracy to interfere with civil rights and forced labor by officials with the North Dakota Department of Commerce (NDDC).

The defendants in the case are Joshua Teigen, former Commerce commissioner during the Doug Burgum administration; Shayden Akason, head of Investments and Innovation with the North Dakota Development Fund (NDDF); Richard Garman, director of Economic Development and Finance; David Lehman, the Advanced Manufacturing Business Development manager; and James Albrecht, NDDF president.

The filed complaint stresses the five defendants are being sued in their personal capacities for the alleged actions while performing official state duties, which Hoefer alleges caused the deprivation of his federal rights. No claims are asserted against the state government of North Dakota.

Hoefer claims these officials enticed him to buy the vacant former Benchmark Electronics facility in Dunseith, thereby embroiling him and his business in a legal quagmire after he discovered alleged aerospace parts fraud and national security violations concealed at the site. Hoefer asserts those violations arose from past illicit State of North Dakota projects, which occurred from 2015-2022.

Hoefer RV

According to the complaint, Hoefer became aware of the Dunseith facility in 2021 when he was seeking a location to establish domestic RV production using proprietary technologies he developed overseas.

A Dec. 16, 2022, press release from then North Dakota Gov. Doug Burgum’s office listed Hoefer RV among a list of notable projects assisted by the state during his administration’s sixth year, noting Hoefer RV invested more than $4 million to purchase and revamp the vacant facility with an accompanying career and technical education center with Dunseith Public School. Based on the release, Hoefer RV had been awarded a $2.25 million revolving line of credit from the NDDF in April 2022.

Beginning in 1980, the 100,000-square-foot facility had operated for decades manufacturing electronics circuitry and related components for commercial, defense, aerospace and other sensitive applications, employing more than 200 workers at its peak until Benchmark Electronics announced the closure of the Dunseith facility in February 2015.

According to an article published in the Feb. 13, 2015, edition of The Pierce County Tribune, the facility’s primary output at the time of the closure was printing circuit boards destined for airplanes or missiles for customers such as Honeywell and Lockheed Martin.

The complaint alleges a coalition of local, federal and high-ranking state officials and Lehman had discretely facilitated, funded and managed continued activities at the shuttered factory after 2015, some of which Hoefer alleges in the complaint was nefarious, illicit and in violation of federal laws and regulations.

According to the complaint, aerospace and defense projects work were continued at the site by Chiptronics, despite the company and the site lacking the necessary federal credentials for U.S. government compliance. Chiptronics dissolved as an entity in March 2020, but Hoefer claims in the complaint the enterprise continued secretively and fraudulently at the site and other locations even after he purchased the facility.

Hoefer claims these activities were concealed from him when he was recruited to purchase the facility to convert it into an RV factory. He states he was left with the responsibility of cleaning the site up after he discovered evidence of this activity in 2023.

Hoefer claims Teigen, Akason and Lehman offered him incentives for his business if he selected the Dunseith facility over other locations in the state, as finding a new business for the site was a priority for them.

Hoefer claims Lehman lied to him about federally-controlled activities on the site ceasing after Benchmark closed and that Benchmark had removed all sensitive materials in 2015.

According to the complaint, a trailer load of records, documents and abandoned aerospace components such as guidance system security assemblies for the Lockheed Martin Guided Multiple Launch Rocket System and Honeywell GG1320 digital ring laser gyroscopes were discovered as Hoefer renovated the facility.

Hoefer claims these sensitive materials and components represent evidence of past and ongoing schemes involving some of the defendants and other state officials.

Remediation, retaliation

In his complaint, Hoefer said the mere presence of the sensitive materials and components discovered at the facility violated the Espionage Act and rendered the site an encumbered federal crime scene.

Hoefer said he contacted Teigen, Akason and Lehman, who promised to support him as he remediated with state and federal authorities. However, Hoefer claims the defendants conspired and acted to protect themselves and deprive him of his federal rights.

Hoefer claimed the defendants had knowledge of the situation they had put him in and intended that he would unknowingly destroy the evidence and therefore become federally liable for any consequences that might arise.

According to the complaint, Hoefer spent months working with various state and federal agencies to investigate and aid in the removal of the sensitive material, including state Bureau of Criminal Investigations agent Craig Zachmeier and Department of Homeland Security Agent Daniel Breijo. Hoefer claims in his complaint Breijo threatened him after he learned Hoefer ignored a directive from Breijo to destroy the accumulated evidence and instead reported the situation to officials with the U.S. State Department.

According to the complaint, an enforcement division chief from the U.S. State Department Directorate of Defense and Trade Controls (DDTC), which enforces the Arms Export Control Act and International Traffic in Arms Regulations, instructed Hoefer to preserve evidence and report to DDTC. Hoefer claims this official at one point told him, “I think you’re being subjected to a political and military cover-up.”

He also claims he and his family experienced ostracization within the local community during the remediation process and were stalked on multiple occasions.

Hoefer said in his complaint he eventually became aware of records which he says confirmed the defendants’ participation in and knowledge of the alleged illicit activities at the facility. This caused the defendants to turn against him and violate his rights in various ways, he said.

According to the complaint, Akason and NDDC CEO Jessica Tooke provided assurances that the NDDF would approve an increase to his credit line to cover legal fees required for the remediation and civil lawsuit they motivated him to file against Benchmark Electronics. Hoefer alleges Tooke threatened him with retaliation, consequences and legal action by the defendants if he reported his ordeal to news media.

The complaint alleges Commerce officials would later accuse Hoefer of misusing funds used for that purpose and froze his credit line despite $200,000 not being dispersed from the original contract. Hoefer alleges the action prolonged the remediation process, leaving him and his business in limbo.

According to the complaint, Tooke communicated to Hoefer on behalf of the defendants that freezing his credit line was a mistake, but Teigen and Akason thought Hoefer had “gone crazy” and had made up the factory evidence. Hoefer disputes the claims by the defendants that they were unaware of the alleged illicit defense projects occurring at the Dunseith site, citing public records he recovered which he claims Commerce officials had previously told him didn’t exist.

Hoefer claims the defendants and other Commerce officials attempted to have him sign a gag order, as well as a backdated mortgage agreement that would have given Commerce a first position lien against the Dunseith site. The complaint also alleges the defendants sabotaged multiple business deals with private investors, which Hoefer said would have satisfied his loan obligations with the states, hampering the RV company’s ability to scale and ramp up production.

Hoefer stated he suffered financial and reputational harm as a result of the defendants’ actions. He is seeking $1.89 billion in lost 2023-2030 wages and income for himself, net income for the Hoefer Group, lost exit equity, direct business financing damages, sabotage of industrial complex developments of additional factories and housing in the Turtle Mountains and Canada, worldwide reputational harm, public humiliation harm and emotional distress.

“The retaliation and oppression and civil rights abuse Mr. Hoefer and his family and his business have been experiencing at the hands of the defendants, continuing to this day, are things no North Dakotan should ever face,” Hoefer’s attorney Thomas James Jr. wrote in a letter provided to The Minot Daily News. “My clients are seeking substantial damages for what they’ve experienced, of course. And we understand state legislators have taken a keen interest in the situation as well, giving my clients the hope that their efforts will end the culture of wrongdoing in Commerce and its affiliates and cause reform, so that this sort of abuse never happens again.”

Teigen, Akason, Garman, Lehman and Albrecht were contacted for comment, but due to the complexity of the filing, and the strong probability that some recipients may not yet have been served, contact attempts were not returned.

According to the summons filed in the case, the defendants have 21 days to file an answer to the complaint or other applicable motions, which will be followed by the discovery phase, in which the parties exchange information. Parties may then file pre-trial motions or attempt to settle the case before it moves forward to a civil trial before a jury.