Minnesota called a training ground for crooked coin dealers.
Calling Minnesota an epicenter for crooked coin dealers, federal authorities have filed charges against three more alleged swindlers.
The total taken in the three unrelated cases topped more than $2 million, prosecutors said, much of it stolen from elderly victims.
“Since the early 1990s, Minnesota has been a haven for coin fraud,” U.S. Attorney Andy Luger said Monday. “The list of unscrupulous coin dealers is long and sad. These cases represent only the most recent examples.”
The three men charged are Dennis Charles Helmer, 53, of Farmington; Tory Evan Hughes, 44, of Minneapolis, and Chrysanthos Nicholas, 55, of Mettituck, New York. Nicholas allegedly defrauded a client from Merrifield, Minn., eight miles north of Brainerd.
The largest fraud case involved Helmer, who was known by several names — Jeff Jones, Mr. Diamond and Dennis Dimon. He devised a scheme that scammed his victims of $1.2 million, federal prosecutors said.
The Helmer case is the first significant investigation since 2013, when Minnesota became the first state to pass legislation targeting unscrupulous coin dealers, according to the state Department of Commerce.
The new laws require bullion coin dealers to obtain a license and a surety bond. In addition, it also requires those who own a coin business or work directly with the public in selling or buying bullion coins to pass a background check.
“No longer can scam artists use bullion coins or collectible coins as an avenue to steal money in Minnesota,” said Commerce Commissioner Mike Rothman.
The market for rare coins is large as investors seek out a hedge against inflation and the unpredictable economy. While there are numerous honest operatives, Minnesota has also become a training turf for fraudsters, as employees at unscrupulous dealers learn the ropes and branch off to start their own schemes, Luger said.
Helmer ran Wholesale Assets Worldwide, which persuaded victims, many of them elderly to send him money, coins and precious metals, based on a false promise to provide money or coins in return, prosecutors said.
Some victims relied on Helmer to provide safe storage for their coins, according to the U.S. attorney’s office.
Helmer “intentionally misled customers about the size and stability of his business, including providing them with copies of a false ‘Dun and Bradstreet Credibility Report’ and stating [his company] had 75 employees and $500 million in annual revenue.”
Instead of fulfilling customers’ orders, Helmer sold many of the coins, using the proceeds to fulfill other orders, make payments to other customers, pay his own personal expenses and attempt to fund start-up costs for another company, Smoke Shack Inc.
When he learned he was under investigation, he allegedly shifted his operations to Florida, forming Best Price International, which continued to defraud customers.
The Helmer indictment, unsealed Aug. 6, charges him with 16 counts of mail fraud and three counts of wire fraud.
A second unrelated indictment charges Hughes with one count of mail fraud in a similar coin scheme. Hughes owned and operated Reputable Rare Coins in Roseville, buying and selling gold, silver and other coins.
“The defendant and his sales staff made unsolicited phone calls, primarily to elderly individuals in an attempt to sell or buy coins,” the prosecutors said in a news release. “Several customers sent money and coins to Hughes and received nothing in return. Hughes is charged with stealing more than $600,000 in cash and coins.”
In a third case, Nicholas of Mettituck, N.Y., allegedly defrauded a victim of $200,000.