Two Gig Harbor men were sentenced Thursday for financial fraud schemes involving an Alaska gold mine and rebuilding efforts in areas hit by Hurricane Katrina.
According to the U.S. Attorney’s Office in the Eastern District of New York:
In the Katrina scheme, the men told developers and clients they had lenders and funds for real estate projects, but required an advance of 10 percent of the loan amount from clients beforehand.
In truth, the men did not have lenders or funds, and stole the advance fees. In total, they stole more than $9 million from about 300 people.
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In the gold mine scheme, the two told investors they were going to mine gold and other precious metals on an Alaska island, and lied about the company and its officers to get investors.
Brad A. Russell, 43, was sentenced to 10 years in prison for the Katrina and gold mine schemes. He also faces three years of supervised release, and must pay almost $10.7 million in forfeiture and restitution to victims.
Kristofor J. Lange, 31, was part of the gold mine scheme, and was ordered to serve five years probation, and to pay $780,000 in forfeiture and restitution. He was not charged in defrauding the land developers.
The mastermind of the schemes, according to U.S. attorneys, was William Lange, 66, of Gig Harbor. He pleaded guilty in September to conspiracy to commit wire fraud and conspiracy to commit securities fraud. He awaits sentencing,
Prosecutors said Lange used the funds in part for salaries, fishing and hunting trips for him and his son, remodeling and landscaping his house and other business ventures.
A fourth man, Frank E. Perkins, 54, of Kentucky, pleaded guilty in September to charges related to his leadership in the schemes.