First American Monetary Consultants, Inc. review: failure to deliver purchased gold 4

Wednesday, May 3, 2017

Tennessee Family Convicted of Decade-Long Gold and Silver Ponzi Scheme

Memphis, TN – After a five-week trial, a federal jury found Larry Bates; his two sons, Chuck and Robert Bates; and Kinsey Bates, the wife of Robert Bates, guilty on all counts set forth in an indictment that charged mail and wire fraud and conspiracy. The charges rose out of the defendants running a decade-long Ponzi scheme in the buying and selling of gold and silver coins. The proof at trial showed that the defendants were able to accomplish the fraud through First American Monetary Consultants, a Colorado corporation, which had offices in Memphis, Tennessee and Boulder, Colorado. More than three hundred and sixty victims lost more than twenty-one million dollars due to the defendants’ illegal scheme, which lasted from as early as 2002 through October of 2013.

"Unfortunately, fraud, corruption and embezzlement can occur everywhere, including in the investment world, " said Larry Laurenzi, Acting United States Attorney, who prosecuted the case along with Assistant U.S. Attorney David Pritchard. "People need to be mindful of this terrible fact and work hard to protect themselves and their families from those who prey on others, like the Bates family preyed on so many innocent victims. As this case shows, the United States Attorney’s Office and its law enforcement partners work diligently to expose people responsible for such fraudulent acts, to vigorously prosecute them, and to bring them to justice."

At trial, the proof showed that the defendants promoted their business through a variety of Christian television and radio programs, including the Jim Baker Show and Jewish Voice. Larry Bates, a self-proclaimed doctor in economics, held conferences across the United States, predicting an economic collapse and emphasizing the need to invest in precious metals. Between 2007 and 2013, customers gave more than eighty-seven million dollars to First American Monetary Consultants for the purpose of buying precious metals. During this same period, the proof showed the defendant diverted customers’ monies that were to be used to purchase precious metals to the defendants own use and

benefit. Testimony at trial showed that by 2009, the company had more than twenty-six million dollars in unfilled customer orders.

The proof showed that the defendants used the customers’ money for a variety of purposes other than purchase of customers’ metals. Larry Bates diverted more than four million dollars to the creation of International Radio Network, a Christian radio network. Other monies were diverted to trading in commodities and the building of a ten-thousand square foot house on three hundred acres in Middleton, Tennessee. Still other customers’ monies were used to fulfill prior orders, which had not been fulfilled.

At trial, the evidence showed that Larry Bates, Chuck and Robert Bates were salespeople in the Memphis office and were responsible for taking in victims’ monies. More than forty-five witnesses testified about losing money to Larry Bates and First American Monetary Consultants. The victims, who lived across the United States, testified that their money was to be used to purchase precious metals that they never received. For example, Judith Ponder, from Kerrville, Texas, testified that she and her mother gave Larry Bates more than $1.8 million dollars to purchase precious metals and received little in return. Similarly, Barbara Santiago, from Washington State, testified that she and her paraplegic son met Larry Bates at one of his conferences in Washington State. Ms. Santiago tested that she later invested more than two hundred and sixty-six thousand dollars from her son’s insurance settlement that was to be used for her son’s care. Ms. Santiago, likewise, received little of what she was promised. And, Charles Grimsley, a pastor for the Veteran’s Administration in Mesa, Colorado, testified that he and his wife gave FAMC more than two hundred thousand dollars of their retirement money and received nothing in return.

The proof showed that many of the victims attempted to take possession of their gold and silver coins, only to be put off by the defendants for a variety of reasons. The excuses for the delays included that the gold and silver coins were scarce, the coins were coming from Europe, and the U.S. mint was shut down. In October 2013, a receiver was appointed to take over the affairs of First American Monetary Consultants. The receiver found that the company had few assets and was unable to compensate the hundreds of victims who had given money to Larry Bates and First American Consultants.

Larry Bates was convicted on all 46 counts in the indictment. Chuck Bates was found guilty of 18 counts of mail and wire fraud and one count of conspiracy. Robert Bates was convicted of five counts of mail fraud, three counts of wire fraud, and one count of conspiracy. Kinsey Bates was convicted on one count of conspiracy and two counts of wire fraud.

Each count of conviction carries a potential sentence of 20 years in prison and a potential fine of $250, 000. The defendants also face potential forfeiture and restitution penalties. The defendants are scheduled to be sentenced on August 3, 2017, by U.S. District Judge Sheryl H. Lipman.

Acting United States Attorney Lawrence J. Laurenzi and Assistant United States Attorney David Pritchard prosecuted the case. The United States Postal Service and the Federal Bureau of Investigation investigated the case.