Another in a growing line of Minnesota coin dealers has been charged with bilking customers looking for a safe investment in the wake of the Great Recession.

Scott Michael Luther, 55, was charged Monday in federal court with mail fraud and money laundering related to the sale of more than $1.5 million in coins through his Minneapolis company, LRC Coins, from 2010 through 2013.

A Star Tribune investigation I reported in 2011 found that the unregulated industry was rife with addicts, ex-convicts and con artists who routinely misled or defrauded customers ā€” frequently seniors looking for a safe investment. Luther told me at the time that he'd been involved in the industry since 2005, and that it was full of "corruption."

"The thing is, people get overcharged and then they send their coins and don't get what they expect they're going to get," Luther said in a February 2011 interview. He said he quit working with other dealers because of what he had witnessed and started his own business by asking God for help.

"I'm in this industry also and I don't take advantage of people and I don't rob people," Luther said.

Federal prosecutors disagree. They charged Luther in a felony information ā€” which generally indicates a plea agreement is in the offing ā€” stating that Luther and his small boiler room staff cold-called coin buyers around the country from 2010 through 2013, and fleeced them.

The charges say that "Luther, through LRC, received over $1.5 million in coins and money from customers intending to purchase or exchange coins. Luther did not fulfill these orders. Rather, Luther sold customers' coins and used their money to pay his personal expenses." Prosecutors say he convinced his customers that he had safeguarded their coins. In fact, they say, Luther stole them and laundered at least some of the proceeds through a Zambian bank.

Luther is scheduled to be arraigned Jan. 23. U.S. District Judge Patrick Schiltz, who is presiding over the case, sentenced another coin dealer last year to 52 months in prison, exceeding what the prosecutor sought and federal guidelines recommended. Schiltz said Jay Flynn's fraud of elderly investors was "particularly brazen and cruel."

Since the newspaper's investigation, federal prosecutors have charged several former Twin Cities precious metals dealers with fraud and related crimes. U.S. Attorney Andrew Luger described Minnesota as a haven for coin fraud since the 1990s. "The list of unscrupulous coin dealers is long and sad," he said.

In 2013, Minnesota became the only state in the nation to create a special regulatory regime for coin dealers, requiring criminal background checks and banning anyone convicted of a financial crime in the previous decade. Coin dealers later got the law changed so that businesses and collectors who sell less than $25,000 in rare coins are exempt from the tougher standards, and easing regulations for small businesses that sell at coin shows.

A bankrupt Twin Cities roofing contractor who tried to reinvent himself during the recession by selling gold and silver coins last year was ordered to pay $2 million in restitution and penalties for defrauding his customers. Schaun K. Waste, of Minneapolis, had operated Guardian Gold & Silver Exchange in Plymouth with the late Ray Hanisco from 2009 until 2013, when they were sued by Minnesota Attorney General Lori Swanson for bilking mostly elderly customers on sales of coins and bullion. Hennepin County District Judge Regina Chu issued the restitution order in December 2015 and banned Waste from the industry for life.