MEMPHIS, Tenn. (AP) — A former Tennessee legislator and his two sons have been charged in a federal indictment with defrauding customers of their gold and silver business of more than $18 million.
Prosecutors say Larry Bates, who served in the Tennessee Legislature from 1971 to 1976, and his sons, Charles and Robert Bates, are accused of encouraging customers to buy gold and silver from First American Monetary Consultants but failed to deliver. Prosecutors say the men told potential customers to buy gold and silver to protect against “Mystery Babylon,” an alleged forthcoming economic, political and religious downturn.
Larry Bates was CEO, and his sons worked for FAMC. Larry Bates was also CEO of Information Radio Network Inc., which prosecutors say provided listeners with advice on topics including politics and world economy.
Attorneys for the men didn’t immediately reply to emails seeking comment.
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Note: Legislative archives show Bates was a Democrat from Martin, representing House District 77, which in the 1970s was comprised of Henry, Lake, Obion and Weakley counties. The AP story is a condensed version of the news release below
News release from U.S. Attorney’s Office, Western District of Tennessee
Memphis, TN – A father and two sons were indicted on multiple charges this week for their alleged roles in a scheme that defrauded victims of more than $18 million.
Larry Bates, a former Tennessee state legislator, was CEO of First American Monetary Consultants (FAMC), Inc. A financial company, FAMC engaged in buying, selling and trading precious metals, primarily gold and silver coins. He was also the CEO of Information Radio Network, Inc. (IRN), a broadcast service that provided radio listeners with information and advice on a variety of topics including politics and world economy.
Larry’s son, Charles “Chuck” Bates, was executive vice president and news director for IRN and an economist with FAMC. Larry’s other son, Robert Bates, was an economist with FAMC.
From May 2002 to October 2013, the trio allegedly encouraged customers, many of whom were Christians and elderly individuals, to purchase copious amounts of certain types of gold and silver from FAMC. All of the individuals targeted by the Bates were seeking advice and help from a supposed trusted Christian advisor and/or an alleged reputable Christian financial company, according to the indictment.
The defendants utilized IRN as a means of advertising, promoting, and soliciting the sale or purchase of gold and silver to and from individuals nationwide, according to the indictment. To execute their scheme, the Bates’ told potential customers that they needed to purchase gold and silver to protect themselves from “Mystery Babylon,” an alleged forthcoming economic, political and religious downturn.
Those who accepted the Bates’ offers provided payment via mail, wire transfers, or through private and commercial interstate carriers to purchase gold and silver from FAMC. Subsequent to submitting their payments, the customers would receive an invoice and order confirmation via mail, according to the indictment.
After the defendants received money and/or gold and silver from customers, they would partially complete the customers’ orders or fail to fill them altogether. The indictment alleges that the defendants utilized a portion of the embezzled proceeds to fund personal expenses and maintain operation of FAMC and IRN. When contacted by customers who didn’t receive their orders, the defendants would allegedly provide false promises, delay returning calls or emails, or neglect to respond altogether. According to the indictment, this activity continued from weeks up to years.
“As the indictment alleges, the defendants defrauded unsuspecting victims of more than $18 million by promising to purchase gold and silver coins on their behalf,” said U.S. Attorney Edward L. Stanton III. “Unfortunately, hundreds of these victims never received the coins they purchased. Instead, their money was used by the defendants to fund lofty salaries and exorbitant lifestyles.”
More than 300 people were victimized during the Bates’ scheme. In addition to individuals in West Tennessee, the Bates’ defrauded people in Texas, Alabama, Kansas, Vermont, Oklahoma, Missouri, Florida, Massachusetts, and a multitude of other states.
All three defendants are being charged with multiple counts of mail and wire fraud. If convicted, they each face up to 20 years imprisonment and up to $1 million in fines per count.