A former Tennessee lawmaker who led a multi-million dollar Ponzi scheme centered on buying and selling gold and silver coins has been sentenced to 21 years behind bars.
Along with the jail sentence, 73-year-old former Democratic state rep. Larry Bates was ordered to pay more than $21million in restitution to more than 400 customers he swindled.
Bates, his two sons, and daughter-in-law were found guilty in May of mail and wire fraud.
The Democrat who served in the Tennessee House from 1971 to 1976, promoted the company though Christian television and radio programs.
Larry Bates will spend 21 years in prison along with his two sons and daughter-in-law for mail and wire fraud
Ex state legislator Larry Bates is pictured with his son Charles (aka “Chuck”) in a promotional video promoting their book
Customers gave more than $87million to First American Monetary Consultants, a Colorado Corporation, for the purpose of buying and investing in precious metals.
Between 2002 and 2013 more than 360 victims lost more than $21million due to the illegal scheme.
By 2009, the company had more than $26 million dollars in unfilled orders.
Prosecutors said Bates and his family kept the money for their personal use, including commodities trading and a 10,000-square-foot house. They used more than four million to create the International Radio Network, a Christian radio network.
And as all good Ponzi schemes go, other costumers’ monies were used to fulfill prior orders that had not been fulfilled.
Customers gave more than $87million to First American Monetary Consultants (pictured) believing that Bates was investing in silver and gold
Bate’s customers begged the company for their coins or reimbursement. They were told the coins were scarce, they were coming from Europe, and the U.S. Mint was shut down.
More than 45 witnesses testified about losing money to Larry Bates and First American Monetary Consultants.
‘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.
Larry Bates was convicted on all 46 counts in the indictment. His son Chuck Bates was found guilty of 18 counts of mail and wire fraud and one count of conspiracy. His other son Robert Bates was convicted of five counts of mail fraud, three counts of wire fraud, and one count of conspiracy. Robert’s wife Kinsey Bates was convicted on one count of conspiracy and two counts of wire fraud.
Bates and his family used the money to buy a 10,000 square-foot home and commodities trading