SALT LAKE CITY — Four men, including two from Utah and two from California, have all been sentenced in connection with a telemarketing scheme that promised investors they had the technology to extract gold from dirt.
According to the U.S. Department of Justice, most of the investor/victims were elderly. The victims were told Matthew Earl Mangum, 51, of South Jordan, was an expert metallurgist and he had developed a revolutionary gold extraction process.
"Investors were told that the defendants controlled this proprietary, breakthrough, nanotechnology that used environmentally friendly means to recover microscopic particles of gold from dirt," a news release from USDOJ says.
According to DOJ, 75-year-old Kenneth Stephen Gross, of Porter Ranch, Calif. was in charge of cold-calling potential investors and passing the information for interested parties to 69-year-old Jonathan Edward Shoucair of North Hills, Calif. and 55-year-old Marc Andrew Tager of Sandy in order to obtain funds from investors.
The news release says the men raised over $8 million beginning in 2014, but only used $3 million for potentially legitimate business purposes.
$2 million went to telemarketers, including Gross, and the other $3 million was spent for the personal benefit of Mangum, Shoucair and Tager, DOJ said.
The defendants created Jersey Consulting LLC and a marketing website that claimed they owned an 80-acre property with a substantial amount of mineral-rich ore. Investors were told they would receive a 100 percent return on their investments within 12 months.
"Investors were also told that their money would be secured by the physical assets owned by Jersey and that the investors would have priority over these assets should the business fail," the news release says. "What investors did not know was that Tager and Shoucair first met while serving multi-year federal prison sentences together for previous fraud related convictions."
Tager was sentenced on April 14 to 43 months in federal prison for conspiracy to commit wire and mail fraud, money laundering, and possession of a firearm by a convicted felon.
Shoucair was sentenced on October 23, 2020, to 72 months in federal prison for conspiracy to commit wire and mail fraud and money laundering.
Mangum was sentenced on November 18, 2020, to 48 months in federal prison for conspiracy to commit wire fraud and money laundering.
Gross was sentenced on January 16, 2020, to 24 months of probation for failing to disclose to federal authorities that he had knowledge that securities fraud was occurring.
"Assistant U.S. Attorneys Jacob J. Strain, Trina Higgins, and Allison Moon in the Utah U.S. Attorney’s Office prosecuted the case. Investigators from the Utah Department of Commerce Division of Securities and Special Agents from the FBI and the IRS conducted the investigation," the DOJ news release states.