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Dealer Pleads Guilty to Bilking Investors in Gold, Silver Scheme

May 10, 1985|BILL FARR | Times Staff Writer

A precious metals dealer who disappeared from his Newport Beach offices four years ago and resurfaced recently in West Germany pleaded guilty Thursday to federal charges linking him to a scheme that allegedly bilked investors out of millions of dollars on gold and silver purchases.

U.S. District Judge A. Andrew Hauk scheduled sentencing of Kent Gordon Alexander for June 10 after accepting his pleas to two counts of mail fraud and one of income tax evasion.

Alexander, 39, faces a maximum sentence of 15 years in prison and a $12,000 fine on the three felony counts.

He was brought back to California in February to face federal charges after his identity was uncovered in Munich, where he had pleaded guilty to fraud charges while operating a videocassette business. German officials subsequently contacted the U.S. Consulate.

His departure in July, 1981, Dymant said, came about a month after FBI agents seized business records from his company, Newport Investment Management Corp., which later used the firm name NIMC Inc. The indictment returned against him also alleged that he defrauded investors through a separate company, NIMC Strategic Metals Inc., which dealt in metals stored in European warehouses.

The U.S. fraud and tax evasion charges stemmed from Alexander's selling of gold and silver, through NIMC, on a future delivery program. But instead of using money he received from investors to buy corresponding amounts of the precious metals, Alexander used most of the funds for operating the business and for personal expenses, according to Dymant.

She said Alexander defrauded customers of NIMC Strategic Metals Inc. in a different way. Investors were supposed to receive warehouse receipts showing they owned the metals stored mainly in Holland. But they never got the receipts, the prosecutor said, and, instead, Alexander converted the metals to his own use.

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