President of Federal Way and Auburn Way based company convicted in ‘Ponzi-type scheme’
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The former president and CEO of a precious metals firm based in Federal Way and Auburn was convicted Friday of mail and wire fraud in what the justice department is calling a “Ponzi-type scheme.”
In a release, federal officials said Bernard Ross Hansen, 60, was convicted of multiple counts of wire and mail fraud that defrauded more than 2,500 customers of $25 million. Also convicted was 48-year-old vault manager Diane Renee Erdmann.
Sentencing is scheduled for October 29. The duo could face up to 20 years in prison for each count of the conviction.
The company, Northwest Territorial Mint (NWTM), had offices in both Federal Way and Auburn. It declared bankruptcy in April of 2016.
According to the release, trial evidence revealed that Hansen and Erdmann defrauded the company’s customers in a “variety of ways.”
“The evidence at trial showed that Hansen and Erdmann lied about shipping times for bullion, used customer money to expand the business to other states, and used customer money to pay their own personal expenses. In this way the company lacked enough assets to fulfill customer orders and used new customer money to pay off older customers in a Ponzi-like scheme,” the release said. “In total, over 2500 customers paid for orders, or made bullion sales or exchanges, that were either never fulfilled or never refunded. The total loss to these customers was more than $25,000,000.”
Bullion is a type of metal that has been refined to a high degree of elemental purity. It typically refers to bulk metal used in the production of coins and especially precious metals such as gold and silver.
Assistant United States Attorney Benjamin Diggs told the jury in closing arguments that “they tried to make this company look solid – like the metals they sold – but in fact it was a house of cards.”
Additionally, the release said that trial evidence revealed that in April of 2016, “the NWTM vaults were inventoried and all or part of the stored bullion for more than 50 customers was missing” for a total of $4.9 million dollars in missing bullion.
