Two men from New Jersey and another from Nevada were convicted by a federal jury for their roles in defrauding multiple victims out of money through a $1 million “upfront-fee” scheme, U.S. Attorney Philip R. Sellinger announced today.
Following a five-week jury trial before U.S. District Judge John Michael Vazquez in Newark federal court, Jerrid Douglas, 49, of Freehold, New Jersey, Harold Mignott, 60, of Voorhees, New Jersey, and Roy Johannes Gillar, 50, of Las Vegas, were each convicted on Oct. 21, 2022, of wire fraud conspiracy and four counts of wire fraud. Gillar and Douglas were also each convicted of one count of transacting in criminal proceeds.
According to documents in this case and evidence at trial:
From March 2016 through June 2016, Douglas, Gillar, and Mignott, along with a fourth conspirator, agreed to defraud the owners of the victim company of approximately $1 million. The defendants fraudulently induced the two victim company owners 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 a “standby letter of credit” (SBLC) backed by either €1 billion in cash or highly lucrative Mexican gold bonds. An SBLC 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.
The victim company 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, the company 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 convince the victims to approve the transfer of the funds, the defendants made numerous verbal and written misrepresentations, including providing the victims with a phony letter from a major international bank saying that it was ready, willing, and able to provide a €1 billion SBLC to the defendants’ shell company.
However, after the victim company owners transmitted $800,000 of the $1 million to the defendants, the defendants failed to provide an SBLC or anything of value. Instead, the defendants misappropriated the money for their personal use.
The wire fraud conspiracy charge and the wire fraud charges each carry a maximum potential penalty of 20 years in prison and a $250,000 fine. The transacting in criminal proceeds charges each carry a maximum potential penalty of 10 years in prison and a $250,000 fine.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the conviction.
The government is represented by Assistant U.S. Attorneys Jason S. Gould and Joshua L. Haber of the U.S. Attorney’s Office Criminal Division in Newark.
courtesy Dept of justice