Three men from New Jersey and another from Nevada were indicted today on additional charges stemming from their alleged advance-fee scheme that defrauded four victims of over $1 million, U.S. Attorney Craig Carpenito announced.
Officials said James Adkins, 65, of Hillside, Jerrid Douglas, 44, of Freehold, Roy Gillar, 45, of Las Vegas, Nevada, and Harold Mignott, 55, of Voorhees, were originally charged by indictment in December 2017 with one count of conspiracy to commit wire fraud and four counts of wire fraud, with Douglas and Gillar also being charged with one count of transacting in criminal proceeds. Today’s superseding indictment adds three counts of wire fraud against Adkins, two counts of wire fraud against Douglas, and one count of wire fraud against Mignott.
All four defendants are currently out on bail and will be arraigned at a later date before U.S. District Court Judge John Michael Vazquez in Newark federal court.
According to the superseding indictment:
From March 2016 through June 2016, Mignott, Adkins, Douglas, and Gillar allegedly agreed to defraud an entity identified in the superseding indictment as “Victim Company A” out of approximately $1 million.
As part of the scheme, the defendants convinced two individuals who ran Victim Company A to enter a joint-venture agreement with the defendants’ New Jersey-based shell company. The defendants falsely represented that their company could acquire and provide Victim Company A with a “standby letter of credit” backed by Mexican gold bonds. A standby letter of credit is a guarantee of payment issued by a bank on behalf of a client that is used should the client fail to fulfill a contractual commitment with a third party.
Victim Company A wanted access to the standby letter of credit so it could purchase raw gold overseas and sell it to gold refineries. As part of the joint-venture agreement, Victim Company A agreed to pay the defendants $1 million for the bank fee associated with the standby letter of credit.
In order to cover up the scheme and acquire Victim Company A’s funds, the defendants made numerous verbal and written misrepresentations, including providing a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion standby letter of credit to the defendants’ shell company.
However, after Victim Company A transmitted $800,000 to the defendants, they failed to provide Victim Company A with a standby letter of credit or anything of value. Instead, the defendants misappropriated Victim Company A’s money for their personal use on items like luxury cars, expensive watches, mortgage payments on their personal residences, and large cash withdrawals.
In addition, Adkins and Mignott allegedly defrauded a farmer from Iowa – identified in the superseding indictment as “Individual Victim 3” — out of $90,000 in 2013. As part of the scheme, Adkins and Mignott induced Individual Victim 3 to enter into a joint-venture agreement with their shell company and told the victim that if he provided them $90,000, they would provide him with a standby letter of credit so he could access financing for his pork business.
In order to persuade Individual Victim 3 to transfer the money, Adkins and Mignott told him that their company was going to complete lucrative oil and gas transactions that would yield significant revenues. However, after Individual Victim 3 transmitted $90,000, Adkins and Mignott did not provide him with money, a standby letter of credit, or anything of value.
Lastly, Adkins and Douglas allegedly defrauded an entity identified in the superseding indictment as “Victim Company B” out of approximately $250,000 in 2015. Adkins and Douglas induced the founder and owner of Victim Company B to enter a joint-venture agreement with their shell company. Adkins and Douglas falsely represented that their company could acquire and provide Victim Company B with a standby letter of credit, which would provide financing for Victim Company B’s biotech business operations.
Victim Company B wanted to obtain the standby letter of credit so it could fund business operations for cancer research as part of its biotech business. As part of the joint-venture agreement, Victim Company B agreed to pay Adkins and Douglas $1 million for the bank fee associated with the standby letter of credit.
However, after Victim Company B transmitted $250,000 of the $1 million to Adkins and Douglas’s shell company, Adkins and Douglas failed to provide Victim Company B with a standby letter of credit or anything of value. Instead, Adkins, Douglas, and others misappropriated the money for their personal use.
The conspiracy to commit wire fraud charge and the wire fraud charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The money laundering charges each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
The charges and allegations contained in the superseding indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.