Ex-lawmaker gets 21 years for ‘end of world’ coin scheme
MEMPHIS, Tenn. (AP) — Larry Bates told listeners of Christian broadcast programs that they should buy gold and silver coins to give them financial protection during a supposedly looming religious and economic collapse termed “Mystery Babylon.”
Trusting Bates’ status as a former Tennessee lawmaker and believing he was an honest Christian man, hundreds of people sent him money, and waited for their shiny coins to arrive.
So many times, the coins never came.
Bates was sentenced Tuesday to more than 21 years in federal prison for leading a multimillion-dollar Ponzi scheme that prosecutors said defrauded more than 400 people from 2002 through 2013.
Bates, his two sons and his daughter-in-law were convicted in Memphis federal court in May of wire and mail fraud. His relatives await sentencing.
U.S. District Judge Sheryl Lipman ordered Bates, 73, to repay more than $21 million to victims. A large number of those victims were elderly Americans who lost life savings and the ability to pay for health care, prosecutors said.
The Bates family worked through First American Monetary Consultants, which had offices in Memphis and Boulder, Colorado. But they found customers from all over the country.
Bates, a Democrat who served in the Tennessee House from 1971 to 1976, promoted the company though Christian television and radio programs. He used the airwaves to question the stability of the world economy as it faced what he described as a religious and social collapse.
Gold and silver can protect people from fluctuating and volatile money markets because they always will be exchangeable, even in “end times,” he said.
Customers gave $87 million to the company for the purpose of buying precious metals. But the Bates family kept money from the payments for their personal use, spending it on commodities trading and a 10,000-square-foot house (930-square-meter) in Middleton, Tennessee. By 2009, the company had more than $26 million dollars in unfilled orders.
Victims begged the company for their coins or reimbursement. They were told that the coins were scarce, the coins were coming from Europe, and the U.S. Mint was shut down.
Judith Ponder, from Kerrville, Texas, testified at trial that she and her mother gave Larry Bates more than $1.8 million dollars. Charles Grimsley, a pastor in Mesa, Colorado, said he and his wife gave the company more than $200,000 of their retirement money.
They got little, if anything, in return.
Lipman said there were customers who received the coins for which they paid, but noted “that is how Ponzi schemes work.”
Bates’ wife and friends spoke on his behalf during the sentencing hearing. Friend Tim Foster said Bates was very principled and called him a “fine Christian man.”
Bates said in court that he was “very sad for these clients of ours.” He accused business competitors, and private and government lawyers, of conspiring against him.
“God is my defender,” he said. “He knows the truth. He will expose the lies.”
Bates’ lawyers argued he should be sentenced to six to nine years, saying that his age and declining health would make him vulnerable in prison. Dr. Robert Burns, a specialist in geriatric medicine, testified Bates suffers from short-term memory loss and early dementia.
Sentencing Bates to a long prison term is a “death sentence for him,” defense lawyer Mary Catherine Robinson told the judge.
The judge disagreed. Bates altered the course of people’s lives, causing them to suffer significantly, she said.
Lipman did not criticize Bates for his religious and world views.
But she did say this: “Your use of religion to gain trust is appalling.”