Jamie Lee Smith, who moved his gold and silver coins business from Minnesota to Wisconsin after the state barred certain ex-felons from the industry, has been sentenced to 4½ years in prison by a federal judge in Madison, Wis., for stealing more than $1.2 million from mostly elderly customers in what prosecutors described as a brazen, yearslong Ponzi scheme.

Prosecutors asked U.S. District Judge William M. Conley, to sentence Smith, 42, of Baldwin, Wis., to near the top of the advisory sentencing guidelines range, which they calculated to be slightly more than 9½ years in prison. They argued that Smith defrauded at least 46 coin and precious metals buyers since his move to Wisconsin in 2014, and many others in Minnesota as far back as 2010.

Smith took in his customers’ coins to evaluate or hold them but then sold them without permission and kept the money for personal expenses, the government says in court filings. He took money to buy coins that he never delivered, and he also used his company to commit bank fraud on WESTconsin Credit Union to obtain a personal home loan.

Smith, formerly of Burnsville, until 2014 operated two companies in Minnesota: American Platinum Gold & Silver in St. Louis Park and American Independent Gold & Silver Inc. in Robbinsdale. They were featured in a Star Tribune investigation in 2011, which found that the unregulated precious metals industry was rife with addicts, ex-convicts and con artists who routinely misled or defrauded customers — frequently seniors looking for a safe investment.

The Legislature responded to the investigation by passing a bill to provide consumer protections for precious metals buyers and giving the Minnesota Department of Commerce oversight over dealers and their employees. The new bullion coin law required criminal background checks and banned from the industry anyone convicted of a financial crime in the preceding 10 years. Dealers also must post a surety bond that can be tapped by consumers in the event of misbehavior.

Two of Smith’s former workers in Minnesota, Robert Gundy and Jay Flynn, were indicted in 2014 and pleaded guilty in 2015 to federal mail fraud crimes. Smith wasn’t charged, but settled a lawsuit with the Commerce Department in 2012 by agreeing to be permanently barred from engaging in deceptive, fraudulent or misleading coin sales or appraisals of the precious metals. Two years later, he moved his businesses to Hudson, Wis., and did exactly that, Assistant U.S. Attorney Daniel Graber wrote.

“Smith’s personal history and characteristics show he is a career criminal who deserves a significant prison sentence for his conduct in this case,” Graber said.

Craig Cascarano, Smith’s Minneapolis attorney, argued in court papers for a sentence below federal sentencing guidelines. He said that Smith’s criminal record overstates the seriousness of his prior offenses and argued that while he did defraud his coin customers, his actions were born of good intentions as he tried to repay clients who were defrauded by Gundy and Flynn. Cascarano noted that Smith had contacted the Minnesota Department of Commerce after he discovered that Flynn, his cousin, had bilked a number of his customers.

Flynn is serving a 52-month sentence for his crimes, and Gundy is serving a 46-month sentence.

The judge determined that the sentencing guidelines actually recommend 77 to 96 months in prison, but sentenced him to 54 months, followed by three years of supervised release. Conley also ordered Smith to pay restitution of $1,137,099 in actual losses.