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Mystery Babylon: Convicted Gold Scammer Larry Bates Sentenced to 21 Years in Federal Prison

Convicted Felon Larry Bates

Convicted of all 46 counts against him, 73-year-old Bates evades maximum sentence of 20 years for each one


By Hubert Walker for CoinWeek ….
On Thursday, September 7, the Acting United States Attorney for the Western District of Tennessee, Lawrence J. Laurenzi, announced the federal sentences given to Larry Bates and three other members of his family for their convictions in a gold and silver Ponzi scheme that defrauded customers from around the country of over $26 million USD in unfulfilled orders. Sentencing had been delayed due to legal motions filed by the defense.

After a five-week-long trial in May of this year, former Tennessee state representative and Christian talk radio host Larry Bates was convicted of the 46 counts of mail and wire fraud brought against him in an earlier federal indictment. Larry’s son Charles “Chuck” Bates was found guilty of 16 counts of mail and wire fraud and one count of conspiracy to commit mail and wire fraud. Another son, Robert Bates, was convicted of five counts of mail fraud, three counts of wire fraud, and one count of conspiracy. Robert’s wife Kinsey Brown Bates was convicted of one count of conspiracy and two counts of wire fraud.

U.S. District Judge Sheryl H. Lipman sentenced Larry and his son Chuck in separate hearings on Tuesday, September 5. The 73-year-old Larry Bates received a total of 262 months (21 years and 10 months) in federal prison plus a subsequent three years of supervised release. He was ordered to pay $21,210,345.39 in restitution, as well as a “mandatory special assessment” of $4,600. Chuck Bates was sentenced to 151 months (12 years and seven months) in federal prison, as well as three years of supervised release. He must also pay restitution to the amount of $19,649,731.70 and a mandatory special assessment of $1,700.

Bates had faced a maximum of 20 years in federal prison for each of the 46 counts of mail and wire fraud.

Then on Wednesday, September 6, Judge Lipman sentenced both Robert Bates, who had been convicted of eight counts of mail and wire fraud and one count of conspiracy, and Kinsey Bates, who had been convicted of two counts of mail and wire fraud and one count of conspiracy. For his part in the scheme, Robert received 151 months in federal prison and was ordered to pay $19,659,911 in restitution and a $900 mandatory special assessment. Kinsey received a federal sentence of 63 months (five years and three months) and must pay $9,526,199.95 in restitution and a $300 mandatory special assessment.

“Today, justice has finally been served to members of the Bates Family as a result of their decade-long Ponzi scheme. Their corruption ploy, which devastated and destroyed the lives of many hard-working individuals, ended today. I hope this will serve as a clear-cut message that the United States Attorney’s Office and its law enforcement partners will work tirelessly to expose and bring to justice people responsible for such acts of greed and corruption,” Laurenzi said in Thursday’s announcement. He and Assistant U.S. Attorney David Pritchard prosecuted the case back in May.

The Scheme

Starting in 2002 and running until a class-action lawsuit by fed-up customers resulted in the company entering receivership in 2012, Larry Bates defrauded over 360 victims by accepting payment for gold and silver coins and bullion that was then never delivered. Calls and emails from customers about their orders were slow to be returned or avoided entirely. If a customer/victim began to make too much noise, they were told lies as to why their order could not be delivered at that time.

Much of the money that customers sent in were siphoned off for personal use by Bates and members of his family.

Approximately $87 million was given to the company during this time, about $26 million of which were for orders unfulfilled by the year 2009.

Two primary companies were used to operate and advertise the scheme.

AM Radio God and Gold CoinsBates founded First American Monetary Consultants (FAMC) in 1985, and was the company’s chairman until it went out of business. With offices in Memphis and Boulder, Colorado, FAMC claimed to offer expertise in banking, government, business planning, intelligence, economics, economic development, finance and forecasting to businesses and politicians. And using $4 million funneled from customers who never received the gold or silver they had purchased from him, he also bought and operated the Information Radio Network (IRN), a radio station that featured political and economic news and opinion from an evangelical Christian viewpoint.

Between May 2002 and October 2013, the Bates family ran advertisements on the station soliciting listeners to buy gold and silver as protection against the “Mystery Babylon” of biblical prophecy.

Sentencing Delays

Lawyers for Larry and Chuck Bates had filed legal motions questioning the accuracy of how the losses had been calculated and whether or not all of the customers involved in the case had been “vulnerable” to the family’s fraud. Additionally, Larry’s lawyers argued that Bates senior should receive only a maximum of six to nine years in prison due to his age and health. Judge Lipman issued an order on September 1 that put an end to these motions, declaring Larry Bates fully responsible for the total amount of money lost by the family’s customers.

“Not only did Larry Bates direct the operation of FAMC and IRN from an executive level, but he also played a direct role in the expansion and perpetration of the fraud by personally soliciting sales from customers and then deceiving all customers through delay tactics and falsehoods regarding the acquisition of the precious metals,” Lipman said in the Sept. 1 order.

“As to the conspiracy … the court finds that Larry Bates’s jointly undertaken criminal activity encompassed the entire scope of the conspiracy, which he spearheaded, and thus, all of the conduct of the co-conspirators was reasonably foreseeable to him … At no point after 2008 was FAMC solvent … Therefore the court finds that he agreed to undertake the entire conspiracy in January 2008,” she also said in the order.

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Hubert Walker
Hubert Walker
Hubert Walker has served as the Assistant Editor of CoinWeek.com since 2015. Along with co-author Charles Morgan, he has written for CoinWeek since 2012, as well as the monthly column "Market Whimsy" for The Numismatist and the book 100 Greatest Modern World Coins (2020) for Whitman Publishing.

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