Customers lost $31 million in gold, silver investments in duo’s Ponzi scheme, feds say
A duo running a precious metals company in Washington duped thousands of customers out of more than $30 million in a “Ponzi-like scheme,” federal officials said.
Bernard Ross Hansen, 61, the former CEO and president of Northwest Territorial Mint, was sentenced to 11 years in prison on 14 counts of wire and mail fraud charges on Monday, June 6, the U.S. Attorney’s Office for the Western District of Washington said in a news release.
Hansen’s partner and vault manager, Diane Renee Erdmann, 49, was convicted on 13 counts of wire and mail fraud charges and sentenced to five years in prison.
Attorneys for Hansen did not immediately respond to McClatchy News’ request for comment.
Erdmann’s attorney told McClatchy News he believes her sentencing was harsh “particularly given Ms. Erdmann’s personal characteristics, her role in the offenses and the nature of her relationship with Mr. Hansen, which even the court characterized as akin to ‘Stockholm syndrome.’”
Northwest Territorial Mint “produced and sold bullion” — nearly pure gold and silver bars or ingots —and offered to store the metals on-site for a fee, according to sentencing documents.
From 2009 to 2017, Hansen and Erdmann “lied about shipping times for bullion, used customer money to expand the business to other states and to pay their own personal expenses” at the businesses in Federal Way, Auburn and other locations, according to authorities.
Hansen used $2 million from the business to buy a company in Nevada, the indictment says. In 2011, he bought another one in Texas, documents show.
By 2012, the duo ”lacked enough assets” to handle their business and began fulfilling new bullion orders by taking metal that was meant to be stored for other customers without refunding them, the indictment shows.
The missing bullion added up to more than $4.9 million, the release states.
In total, more than 3,000 people were defrauded out of about $31.4 million in the ”Ponzi-like” scheme, sentencing documents show.
Prosecutors said these customers bought silver and gold bars believing it was a safe investment that would increase their money over time.
“Mr. Hansen and Ms. Erdmann defrauded more than 3,000 people of some $30 million – money that represents the victims’ plans and dreams: retirement, college funds, and inheritances,” U.S. Attorney Nick Brown said in the release. “It is heartbreaking to hear how the fraud upended their lives and left them working longer, harder, and in deep stress to try to recover.”
In addition to the pair’s prison sentence, Hansen was ordered to pay $33.7 million in restitution, and Erdmann was ordered to pay $32.1 million in restitution.
This story was originally published June 8, 2022 at 1:35 PM with the headline "Customers lost $31 million in gold, silver investments in duo’s Ponzi scheme, feds say."
