A former Democratic Tennessee state lawmaker from Martin was sentenced this week to more than 21 years in federal prison for leading an elaborate Ponzi scheme that defrauded more than 400 people, reports the Associated Press.
Larry Bates was sentenced Tuesday in Memphis, where he was also ordered to repay more than $21 million to victims.
Bates ran the multimillion-dollar Ponzi scheme from 2002 through 2013, during which time he pitched gold and silver coins to listeners of Christian radio and TV programs. He said the coins would offer financial protection during a religious and economic collapse he said was coming.
Bates, 73, served in the state House from 1971 to 1976, representing northwest Tennessee counties.
His two sons and his daughter-in-law were also convicted in May for their part in the scheme. One of his sons, Chuck Bates, was sentenced Tuesday in a separate hearing. Chuck Bates was sentenced to 12 years and seven months in prison and ordered to pay $19.6 million in restitution, reports the Memphis Daily News.
Working through the First American Monetary Consultants, with offices in Memphis and Boulder, Colorado, the Bates family recruited customers from across the country. Many were elderly Americans.
By 2009, the company had more than $26 million in unfilled customer orders, according to a news release issued in May by the federal prosecutor’s office.
“The proof showed that the defendants used the customers’ money for a variety of purposes other than purchase of customers’ metals,” the news release said. “Larry Bates diverted more than four million dollars to the creation of International Radio Network, a Christian radio network. Other monies were diverted to trading in commodities and the building of a ten-thousand square foot house on three hundred acres in Middleton, Tennessee. Still other customers’ monies were used to fulfill prior orders, which had not been fulfilled.”
Dozens of victims testified during the trial. Judith Ponder of Texas said she and her mother gave Larry Bates more than $1.8 million to buy precious metals and received little in return. Charles Grimsley, a pastor for the Veterans Administration in Colorado, testified that he and his wife gave Bates’ company more than $200,000 of their retirement money and received nothing.
The company offered various excuses for the delays, including that the coins were scarce, the coins were coming from Europe and the U.S. mint was shut down.
Larry Bates said in court that he was “very sad” for the victims and accused business competitors and lawyers of conspiring against him.
“God is my defender,” Bates said. “He knows the truth. He will expose the lies.”