The owner of a Vancouver coin shop who defrauded customers out of $1.4 million was sentenced in federal court Friday to four years in prison.
Blue Moon Coins owner Aaron Michael Scott, 40, of Portland was indicted in October by a grand jury on 11 counts of wire fraud and five counts of mail fraud, according to a statement released by U.S. Attorney Brian T. Moran.
More than 139 customers were defrauded out of $1.4 million, with individual losses ranging from just over $2,000 to more than $154,000, Moran said in a statement on the sentencing.
Scott was sentenced on a single count of wire fraud as part of a plea agreement, according to a judgement affidavit. He pleaded guilty to the charge Nov. 1.
The Vancouver Police Department began investigating Blue Moon Coins in 2014 after customers claimed they had paid for gold and silver coins from the business’ website but received nothing in return. The shop abruptly closed after the investigation began, though a related business, Affordable Precious Metals, continued to operate at the site for a time. It is no longer at that location.
The indictment alleges that between October 2013 and April 2014, Scott repeatedly accepted customer money for the purchase of precious metals and coins, and then used the money for his personal and company expenses.
Scott told customers the money would be used to immediately purchase the coins and metals, but instead it was used for expenses or to fulfill earlier customer orders in the form of a Ponzi scheme, according to the indictment.
He used several excuses for the delays in receiving the items: weather, a supplier going bankrupt, a corporate buyout, delayed armored truck delivery and a bad flu season, Moran said.
In 2015, Scott declared bankruptcy, and it was discovered he had a web of businesses, including producing rap albums and making custom jewelry, such as gold teeth or “grills,” according to federal prosecutors. During the fraud scheme, he owned a Maserati and Porsche but transferred ownership of the cars before the bankruptcy filing.
The U.S. Commodities Futures Trading Commission has filed a civil enforcement action against Scott and Blue Moon Coins seeking restitution for the victims and a permanent registration and trading ban, which would prevent Scott from running a similar business when he is released.
But the government’s sentencing memorandum, written by Moran and Assistant U.S. Attorney David Reese Jennings, admits it is unlikely people who were defrauded will ever get their money back.
“(Scott) will never be able to pay restitution. The victims will never be made whole … The victims will only grow more jaded, and they will question how the defendant can go on operating a business and leading a normal life when he has so brazenly stolen from them and so many others. They will experience a futility that can only be cured by justice, the sentencing memorandum states.
“Justice in this case calls for jail time. Justice in this case calls for a sentence that brushes aside (the) defendant’s unwillingness to accept true responsibility,” the memorandum says.